Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Pontefract Corporation Bill (by Order),

Second Reading deferred till Friday.

LAND DRAINAGE PROVISIONAL ORDER (No. 1) BILL,

"to confirm a Provisional Order under The Land Drainage Act, 1918, relating to a drainage district in the administrative county of Westmorland," presented by Mr. GUINNESS; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 75.]

Oral Answers to Questions — LEAGUE OF NATIONS.

OPIUM AGREEMENT.

Viscount SANDON: 1.
asked the Secretary of State for Foreign Affairs whether the Opium Convention has been ratified by the Government; if not, why it has been delayed and when it will be ratified; whit Governments have deposited ratifications at the League of Nations; whether the Convention has yet taken effect; and whether the Central Board has been set up?

The SECRETARY of STATE for FOREIGN AFFAIRS (Sir Austen Chamberlain): The British ratifications of the Opium Agreement and Dangerous Drags Convention, signed at Geneva on the 11th and 19th February, 1925, respectively, were deposited with the League of Nations on 17th February. So far as His Majesty's Government are aware, no foreign Power has yet ratified the Agreement or Convention. Under Article 36 of the Convention, the Con-
vention will not come into force until it has been ratified by ten Powers, and under Article 19, the Central Board will be appointed within three months from the coming into force of the Convention. Under Article 14 of the Opium Agreement, the Agreement will come into force on the ninetieth day after the receipt by the Secretariat-General of the League of Nations of ratifications by two Powers.

Viscount SANDON: What is the difficulty which is causing this matter to be held up?

Sir A. CHAMBERLAIN: What is holding the matter up is the fact that other Powers have not deposited their ratifications. I do not think there is anything which we can do.

PASSPORTS.

Colonel DAY: 2.
asked the. Secretary of State for Foreign Affairs whether he will bring before the League of Nations the question of the passport system with a view to abolishing irksome restrictions?

Sir A. CHAMBERLAIN: I would refer the hon. Member to the reply returned to the hon. Member for Acton (Sir H. Brittain) on the, 10th ultimo.

DISARMAMENT CONFERENCE.

Mr. RENNIE SMITH: 6.
asked the Secretary of State for Foreign Affairs when and where the preliminary conference on disarmament arranged by the League of Nations will take place?

Sir A. CHAMBERLAIN: The first meeting of the Preparatory Committee on Disarmament will take place at Geneva on 18th May.

Mr. SMITH: Will the right hon. Gentleman say what the position is in regard to Russia?

Sir A. CHAMBERLAIN: The Council at its meeting addressed, or directed the Secretary-General to address, a reply to the Soviet Government. That reply, of course, cannot be published until the Soviet Government has received it. It will then, I imagine, be published by the Secretariat.

Lieut. - Commander KENWORTHY: Can the right hon. Gentleman say who the British representatives will be at this preliminary Conference?

Sir A. CHAMBERLAIN: All matters in connection with this Conference have been dealt with by my Noble Friend, Lord Cecil. I hope he will be available.

Colonel WEDGWOOD: Is it a fact that America will be represented at this Conference, and, if so, will it be possible to have any conversations with that country before the Conference takes place—[HON. MEMBERS "Oh!"]—in order to secure a united front?

Sir A. CHAMBERLAIN: What a curious commentary on yesterday's Debate! I hope that America will be represented.

Mr. RILEY: Will consideration be given to whether the Conference can be held at some other place than Geneva?

Sir A. CHAMBERLAIN: That is a matter dealt with in this letter from the Council which was directed to be sent in reply to the Soviet Government. I understand, as I have said, that it will be published by the League authorities after it has reached the Soviet Government.

Colonel WEDGWOOD: Are we to understand that in future the same policy will be adopted towards the French Government: and towards the American Government in these matters?

Sir A. CHAMBERLAIN: Our policy is one of friendly co-operation with all Governments of good will.

LOCARNO TREATY.

Colonel WEDGWOOD: 4.
asked the Prime Minister whether our obligations and liabilities under the Locarno Treaty only come into operation after the entry of Germany into the League of Nations; and whether any alteration in the Treaty in this regard, whether made by agreement, note or verbal assurance, will be submitted to Parliament for sanction, as was the original Treaty, before becoming an understanding honourably binding upon this country?

Sir A. CHAMBERLAIN: Yes, Sir.

Oral Answers to Questions — RED SEA (SLAVE TRAFFIC).

Lieut. - Commander KENWORTHY: 3.
asked the Secretary of State for Foreign Affairs how many slave dhows have been captured in the Red Sea area during the
last three years; how many of these had slaves on board; where had these slaves been embarked; under whose control is this territory or territories; through what territories do the Abyssinian slave traders pass to reach the coast with the slaves; and under whose control is this territory?

Sir A. CHAMBERLAIN: No slave dhows have been captured by His Majesty's ships in the Red Sea since 1922 nor, so far as I am aware, by the warships of any other Power.

Lieut.-Commander KENWORTHY: Can the right hon. Gentleman give me any information with regard to the last part of the question? I have asked the First Lord of the Admiralty about it already. Does the right hon. Gentleman know through what territory these slaves pass to the coast?

Sir A. CHAMBERLAIN: No, Sir. No slaves have been captured, therefore there are no routes by which any captured slaves came through to the coast.

Lieut.-Commander KENWORTHY: Is the right hon. Gentleman aware that the First Lord of the Admiralty is keeping vessels there to prevent this unholy traffic; and has he any information as to how slaves get to the coast from the inland State of Abyssinia? That is the point of the question.

Mr. HARRIS: Does the right hon. Gentleman suggest that the traffic has ceased?

Sir A. CHAMBERLAIN: The question was how many slave dhows had been captured, how many of these had slaves on board and under whose control is the territory through which the slave traders pass? I thought the last part of the question referred to slaves who had been captured. As none was captured, I have not prepared myself with further information. If the hon. and gallant Gentleman puts down another question, I will see whether there is any further information available.

Oral Answers to Questions — ITALY AND SERBIA.

Mr. HARRIS: 4.
asked the Secretary of State for Foreign Affairs whether the recent new treaty negotiated by Italy with Serbia was made in consultation with the
League of Nations; and whether it is customary, before such treaties are ratified by the contracting Powers, to deposit them with the League for the approval of the Council of the League?

Sir A. CHAMBERLAIN: I would refer the hon. Member to the reply which my hon. Friend returned to the right hon. Gentleman the Member for North Norfolk (Mr. Buxton) on the 15th March, to which I have nothing to add. The answer to the second part of the question is in the negative.

Mr. NOEL BUXTON: In reference to the answer given previously, are the new points of agreement such as will come under the provisions of Article 18 of the Covenant?

Sir A. CHAMBERLAIN: So far as I know there is no agreement at present.

Mr. HARRIS: Is it not desirable that these treaties should be deposited with the League, so that the League may have official knowledge of their terms?

Sir A. CHAMBERLAIN: It must be a treaty before it can be deposited. So far as I know there is no treaty.

Oral Answers to Questions — RUSSIA (RELATIONS WITH GREAT BRITAIN).

Mr. BECKETT: 5.
asked the Secretary of State for Foreign Affairs whether he has received any communication from M. Rakovsky and M. Litvinoff, through His Majesty's Ambassador in Berlin, stating that the Soviet Government is anxious to enter into friendly relations with Great Britain; and, if so, what reply he has made?

Sir A. CHAMBERLAIN: No such communication has been received.

Mr. BECKETT: If any communication of this nature was made to His Majesty's Ambassador in Berlin, would not the right hon. Gentleman have information of it?

Sir A. CHAMBERLAIN: I think if any communication had been made I should have received information.

Mr. TAYLOR: Would the right hon. Gentleman be prepared to give sympathetic and careful consideration to any
new suggestion which embodied the recognition of pre-War debts and not War debts, if such a proposal were made?

Mr. SPEAKER: That is a hypothetical question.

Oral Answers to Questions — ROYAL NAVY.

CRUISERS (REPAIRS).

Lieut. - Commander KENWORTHY: 7.
asked the First Lord of the Admiralty why the sum of £168,380 is shown as being spent on His Majesty's Ship "Dartmouth," in view of the age of this vessel and the proposal to scrap immediately three cruisers of a similar class; how much has been spent on repairs to His Majesty's ships "Chatham" and "Dublin" during the last two years; whether these repairs made these vessels efficient for sea service; and why it is proposed to scrap them immediately after this expenditure?

The PARLIAMENTARY SECRETARY to the ADMIRALTY (Mr. Davidson): The work on "Dartmouth" to which the estimated expenditure of £168,380 relates was commenced in September, 1924, and was well advanced before it was decided as one of the special measures of economy to scrap other ships of approximately similar age and type. This large refit will enable the "Dartmouth" to remain an efficient unit of the Fleet for five more years. The expenditure incurred on annual upkeep to "Chatham" and "Dublin" during the last two years amounts to £11,160 on "Chatham" and £13,190 on "Dublin." Provision was made in the 1925–26 Navy Estimates for commencing "large repairs" to both these ships, but owing to the decision to scrap them the work so provided for was not proceeded with.

Lieut.-Commander KENWORTHY: Has the work of preparing the "Chatham" and the "Dublin" been commenced?

Mr. DAVIDSON: No.

DOCKYARDS (ELECTRICAL SUPPLY).

Lieut. - Commander KENWORTHY: 8.
asked the First Lord of the Admiralty whether, with regard to the statement in Cmd. 2595, page 10, of expenditure for modernisation of electric generating stations at His Majesty's dockyards and shore establishments, he will state at
which establishments it is proposed to undertake this modernisation, and what is the estimated cost; and whether he will consider postponing this expenditure until the Government's policy for the improvement of the electrical supply of the whole country has been settled?

Mr. DAVIDSON: The establishments at which modernisation of the electric generating stations is being proceeded with are Portsmouth, Devonport and Chatham Dockyards. The estimated costs are as follow:





£


Portsmouth
…
…
254,000


Devonport
…
…
166,000


Chatham
…
…
107,000


The work at Portsmouth and Chatham is well in hand. It will be completed at Chatham in 1926 and at Portsmouth in 1927. Similar extension and modernisation work is necessary at Devonport to meet the ever increasing demands for electrical energy. We will keep in close touch with the Ministry of Transport about the progress of the general electricity scheme with a view to any economies that may be derived in future from co-operation; but the Board are satisfied that there is no ground for postponing the fulfilment of the urgent needs of the dockyards on this account.

Lieut. - Commander KENWORTHY: Has the Board considered the advantages of receiving electricity at a distance from the dockyards, in view of possible attack in time of war, so that the dynamos at the yards will not be put out of action?

Mr. DAVIDSON: I think all the relevant considerations have been taken into account.

Commander WILLIAMS: When is the hon. Gentleman's Department going to get on with the Devonport electrical station?

Mr. DAVIDSON: As soon as possible.

SEA BOOTS (ISSUE).

Mr. BRIANT: 10.
asked the First Lord of the Admiralty if the sea boots issued for the use of sailors are actually distributed to them when cleaning the decks and doing similar work?

Mr. DAVIDSON: Sea boots are actually distributed to the men for wear on the occasions when their use is necessary.

Mr. BRIANT: As I have evidence in direct contradiction of the statement, will the hon. Gentleman have instructions given that boots are to be issued, not only to the ships, but to the men as they require them?

Mr. DAVIDSON: I shall be glad to have any evidence which the hon. Member may have obtained.

CAPITAL SHIPS.

Mr. ROBINSON: 14.
asked the First Lord of the Admiralty whether the Research Department is investigating the value of capital ships of 10,000 tons in modern warfare; and if he will consider whether further economies could be effected by building smaller and more speedy ships suitable to the modern conditions of sea warfare, as disclosed during the operations of the Great War?

Mr. DAVIDSON: The value of smaller capital ships for modern warfare has been investigated by the appropriate Departments of the Admiralty and by the Naval Staff on several occasions. The hon. Member may, however, rest assured that between now and the time for replacing capital ships under the provisions of the Washington Agreement every consideration and research and experiment that might lead to the adoption of a more economical unit will continue to be fully investigated.

NON-CONTINUOUS SERVICE.

Mr. HORE-BELISHA: 11.
asked the First Lord of the Admiralty whether it is the intention of the Admiralty to introduce non-continuous service to all branches of the lower deck or only to seamen, stokers, officers' stewards, and marines?

Mr. DAVIDSON: Apart from the decision to revert to the practice of entering a small proportion of seamen under a special service engagement, which is not quite the same as a non-continuous service engagement, there is no present intention of extending the non-continuous service system. Officers' cooks may be entered either for continuous or non-continuous service, but Royal Marines are entered for continuous
service only and stokers are not being entered at present except for continuous service.

Mr. HORE-BELISHA: 12.
asked the First Lord of the Admiralty what retaining fee, if any, non-continuous service ratings will receive on being transferred to the Reserve; how long they are eligible to serve in the Reserve; and whether they will receive a gratuity or bonus on being discharged from the Reserve on completion of their time?

Mr. DAVIDSON: Special service ratings on transfer to the Royal Fleet Reserve will receive the usual retainer of 6d. a day; they may, if they wish, and if they continue to fulfil the requirements of the Royal Fleet Reserve Regulations, remain in the Reserve to complete 20 years' qualifying service in the Fleet and Royal Fleet Reserve combined, provided they can complete the qualifying service before the age of 45. Reservists who complete the 20 years' qualifying service receive a gratuity of £100 on discharge from the Reserve.

Mr. HORE-BELISHA: 13.
asked the First. Lord of the Admiralty whether, in view of the additional expenditure that will be incurred through retainers, travelling expenses during training whilst in the Reserve, and bonuses on discharge, and bearing in mind the difficulties that men unskilled in civil employment, discharged in the prime of life under the non-continuous service system, will experience in obtaining work, he will consider adhering to the present system of service as the more advantageous and the more conducive to the efficiency of the Fleet?

Mr. DAVIDSON: The answer is in the negative. The decision to revert to the practice of entering a small proportion of Special Service Seamen was made after careful consideration, and I am unable to agree with the hon. Member's view of the matter.

Oral Answers to Questions — DOVER. HARBOUR (WESTERN ENTRANCE).

Major GLYN: 15.
asked the First Lord of the Admiralty whether his attention has been called to the accident at Dover Harbour to the mail steamer "Maid of Kent"; and whether lie is prepared to reconsider his decision on the subject of the block ships at the harbour entrance?

Sir ROBERT GOWER: 38.
asked the President of the Board of Trade whether his attention has been called to the effect on navigation of the block ships sunk during the War at the western entrance of Dover Harbour; and whether, in the interests of ships entering and leaving that port, he proposes to take any action in the matter?

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Sir Burton Chadwick): I understand that the Dover Harbour Board, who are the authority directly responsible for navigation in Dover Harbour, are promoting a Bill which would give them power to close the western entrance to the harbour and remove the block ships.

Major GLYN: How is it that while I addressed this question to the Admiralty—on account of a previous answer from the First Lord to the effect that there was no danger to navigation in this case—I get a reply from the Board of Trade which does not meet my question at all?

Sir B. CHADWICK: I cannot go into that question. The Dover authorities are promoting a Bill to deal with this matter, and I imagine the Dover authorities will he very well informed as to the navigation problems involved.

Major GLYN: May I ask the representative of the Admiralty whether there is no danger in navigation, in view of the accident to the "Maid of Kent"?

Mr. DAVIDSON: My information is that if the ship in question had obeyed Admiralty instructions, there might have been a different result.

Major GLYN: As this is an important matter, may I ask that reconsideration be given to it, and that until this particular entrance to the harbour is closed, instructions should he given to ships to use the other entrance?

Mr. HARRIS: Cannot the two Departments—the Board of Trade and the Admiralty—consult on this question?

Mr. DAVIDSON: They do.

Oral Answers to Questions — UNEMPLOYMENT.

QUARRYMEN.

Viscount SANDON: 16.
asked the Minister of Labour, in respect of the
United Kingdom and Shropshire separately, the number of men normally engaged in quarrying who are out of employment and on part-time, respectively, stating in the latter case the time that is being worked; and what cost to the State is involved as regards both areas?

NUMBER OF INSURED MEN IN THE QUARRYING INDUSTRY RECORDED AS UNEMPLOYED AT 22ND FEBRUARY, 1926.


—
Great Britain.
Shropshire.


Wholly unemployed.
Temporary stoppages.
Total.
Wholly unemployed.
Temporary stoppages.
Total.


Iron ore and iron stone mines and quarries.
2,540
349
2,889
1
—
1


Stone quarries and mines
2,328
550
2,878
100
2
102


Slate quarries and mines
201
208
409
15
—
15


Other mining and quarrying
2,092
752
2,844
145
21
166


Clay sand, gravel and chalk pit digging.
488
35
523
—
—
—


Total
7,649
1,894
9,543
261
23
284

I am unable to state the amount of time being worked by men who are temporarily stopped.

The amount of unemployment benefit paid to these quarrymen is not separately recorded, but may be estimated at about £6,700 per week in Great Britain and about £200 per week in Shropshire. This benefit is paid out of the Unemployment Fund to which employers, workpeople and the Exchequer contribute.

MINERS.

Mr. MARDY JONES: 18.
asked the Minister of Labour if his attention has been drawn to the practice of the Employment Exchange of Pontypridd to call upon skilled coalminers who are unemployed to accept casual work on occasional days to carry advertisers' boards through the streets of Pontypridd, and to stop their unemployment benefit if they refuse this particular work; and, in view of the fact that this enforcement is causing resentment amongst the mining population of Pontypridd, will he undertake to put a stop to this practice?

Sir A. STEEL-MAITLAND: Certain colliery labourers and others fit for light employment only, were offered casual work of this nature on one occasion re-

The MINISTER of LABOUR (Sir Arthur Steel-Maitland): As the information involves a considerable number of figures, I will, with the permission of my Noble Friend, circulate a statement in the OFFICIAL REPORT.

Following is the statement:

cently. The claims of those who refused the offer were referred to the chief insurance officer who allowed benefit to continue.

Mr. JONES: Is the Minister aware that this action of the officials in calling for skilled miners who are out of work to carry advertisement boards through the streets of Pontypridd has aroused considerable resentment; that the sons of unemployed miners coming home from work saw their fathers carrying these boards in the streets; and that the womenfolk of Pontypridd have resented this very much and have challenged the action of the Ministry in this matter?

Sir A. STEEL-MAITLAND: All that I can say is that the Exchanges, quite rightly, offer alternative employment to men who are out of work, but in this case the question as to whether or not that alternative employment was suitable and according to the law was put up to the Chief Insurance Officer, who decided in favour of the men.

Mr. JONES: But cannot I have the opinion of the right hon. Gentleman as to whether he approves of this kind of action by his local officials? Does he not appreciate the fact that skilled miners
resent being treated like sandwich men in this way? In view of the unsatisfactory reply of the Minister, I beg to give notice that I shall raise this question at the earliest opportunity on the Motion for the Adjournment of the House.

Mr. T. WILLIAMS: 22.
asked the Minister of Labour how many miners were out of work and receiving unemployment pay for the last week when figures are available; and how many of these cases were men who previously had been partially incapacitated whilst following their employment?

Sir A. STEEL-MAITLAND: On 22nd February, 1926, the latest date for which figures are available, the number of persons classified as belonging to the coal-mining industry recorded as unemployed at Employment Exchanges in Great Britain was 118,736. The number of such persons with claims to benefit current at that date was 113,315, but I am unable to say how many of these were then actually in receipt of benefit, nor can I state how many had previously been partially incapacitated whilst following their employment.

Mr. WILLIAMS: Since the matter referred to in the latter part of the question is of peculiar importance to us, will the right hon. Gentleman endeavour to secure the information desired?

Sir A. STEEL-MAITLAND: I will certainly inquire to see whether the statistics are collected in a form which makes it possible to give the information. That is always my trouble in either asserting to or dissenting from getting information, as to how far it is possible to get it. If the statistics allow it, I will gladly get it.

Mr. SPENCER: Ts the right hon. Gentleman aware that there is a tendency to get rid of men suffering from miners' nystagmus in particular, and to throw them on to the Unemployment Fund, and then, when it is found impossible for these men to get further work, they are thrown on to the guardians, and cannot he do something, in consultation with the Home Secretary, to see to it that at least in regard to nystagmus men fair treatment is given by which they will get compensation?

Mr. SPEAKER: That does not arise eat of this question.

BENEFIT DISALLOWED.

Mr. BATEY: 19.
asked the Minister of Labour the number of miners in Durham County who have applied for unemployment insurance benefit and been refused since 31st July, 1925?

Sir A. STEEL-MAITLAND: I regret that I am unable to furnish this information, as the statistics of claims to benefit do not distinguish between the various industries or occupations.

Mr. BATEY: But last year the right hon. Gentleman supplied the same information, and how could he do it last year if he cannot do it this year?

Sir A. STEEL-MAITLAND: if I am right, this was not exactly what I supplied last year, when I made certain quite special arrangements—if I am right in remembering it—in order to find out how particular industries were affected. I am speaking from memory and, therefore, subject to correction, but in the ordinary course we do not tabulate these claims by occupation, and if we were to do so, it would mean such an, amount of extra staff that I could not promise to undertake it.

Mr. HAYES: 20.
asked the Minister of Labour whether he will inquire into the case of Miss Agnes Doyle, of 11, West-bourne Street, Liverpool, who was refused unemployment benefit from 16th January, 1926, on the ground that she was not genuinely seeking work because she opposed the suggestion that she should go into domestic service; and, in view of the fact that Miss Doyle had for four years prior to the 15th January been employed as a waitress at the Bon Marche, Liverpool, that her employment ceased through no fault of her own, that her widowed and ailing mother is 72 years of age and utterly incapable of looking after the home, and that Miss Doyle has since obtained temporary employment as a half-day waitress, will he cause the decision not to grant unemployment benefit to be reviewed?

Sir A. STEEL-MAITLAND: The disallowance of benefit in this case was confirmed by the Court of Referees. As, however, the case raises somewhat difficult questions as to the right to benefit, the Chief Insurance Officer is referring it to the Umpire for an authoritative decision.

Mr. HAYES: Will the right hon. Gentleman now note that further information has come to hand that this particular girl is again unemployed, and that the need for benefit is, therefore, more urgent than it was before?

Sir A. STEEL-MAITLAND: Yes.

Miss WILKINSON: 25.
asked the Minister of Labour whether he is aware that Oswald Gray, of 15, Taylor Street, Middlesbrough, an ex-service man, was refused employment as a cleaner at the Middlesbrough Post Office on the ground that he had an artificial foot, and that he has been refused his benefit, on the ground of not genuinely seeking work; and whether, in view of the difficulty of so injured a man getting work, he will make special inquiries into the case?

Sir A. STEEL-MAITLAND: I am having inquiries made, and will let the hon. Member know the result as soon as possible.

WOMEN, GREATER LONDON.

Mr. T. WILLIAMS: 23.
asked the Minister of Labour how many women were out of work and receiving unemployment pay in the London area in the week ending 27th February, 1926?

Sir A. STEEL-MAITLAND: At 1st March the number of women on the registers of Employment Exchanges in the area of Greater London was 22,293. Of this number, 19,238 had claims to benefit current, but I cannot say how many were actually in receipt of benefit at that date.

DOMESTIC SERVICE.

Mr. T. WILLIAMS: 24.
asked the Minister of Labour whether it is on the instructions of his Department that Employment Exchanges send unemployed women from South Yorkshire to districts below London to take up domestic service, and, should any woman refuse to travel such a distance, refuse unemployment pay?

Sir A. STEEL-MAITLAND: In administering the Unemployment Insurance Scheme the Department are bound to offer any available situations in domestic service to claimants for benefit for whom this work is suitable. The Department do not, however, make any special point of sending unemployed women from South
Yorkshire to below London, and I cannot find that any such transfer has been made by the Exchanges recently or that benefit has been disallowed on refusal to agree to it.

Mr. WILLIAMS: Is the right hon. Gentleman not aware of the case that I brought to his notice, where a South Yorkshire woman was informed that. unless she went to a domestic position below London, her unemployment pay would be stopped, and does he think that, if there are 22,000 women out of work in London, there is either any common sense or justification in sending women there?

Sir A. STEEL-MAITLAND: I am glad to make inquiries into the particular case mentioned by the hon. Gentleman, but the fact of that number of women being out of work in London does not necessarily prove it or disprove it. Always in these cases I am careful to give instructions that the officials should see whether women who are unemployed are suitable for domestic service, and I gather that that is what hon. Members opposite would wish. It may quite well be that there are women out of employment who are not suitable for domestic service and, therefore, should not be offered it.

Mr. MARDY JONES: Does the right hon. Gentleman not take any precautions to ascertain whether prospective employers, for domestic service in London, of girls from South Yorkshire or anywhere else in Britain are really suitable people? We have reason to believe that at times they are simply decoys.

Sir A. STEEL-MAITLAND: I have already answered questions on that point. to which I would refer the hon. Member.

Mr. T. WILLIAMS: Will the right hon. Gentleman assure us that these long-distance journeys will not be used as an intimidation to women thrown out of work in Yorkshire?

Sir A. STEEL-MAITLAND: There is no intention to do that.

DEPENDANTS' BENEFIT.

Miss WILKINSON: 26.
asked the Minister of Labour what is the average total weekly amount paid to men and women, respectively, as dependants' benefit under unemployment insurance?

Sir A. STEEL-MAITLAND: Separate records of the amounts paid by way of dependants' benefit are not kept, and I regret, therefore, that I cannot give the information desired.

ELLAND DIVISION (STATISTICS).

Mr. ROBINSON: 27.
asked the Minister of Labour what is the number of men resident in the Elland Division of the West Riding of Yorkshire who have been accepted for training in the centres maintained by his Department; what is the total number of registered unemployed in the division; and whether he has any information as to the number of women who have been refused standard unemployed benefit, and the number of men and women, respectively, who have been refused extended benefit?

Sir A. STEEL-MAITLAND: I assume the hon. Member refers to the centres for training young unemployed men. So far as information is available in my Department, there are no young men in training at these centres from the Elland Division. As regards the number of registered unemployed, statistics are available only in respect of the Employment Exchange at Brighouse and branch offices at Elland and Greetland. The number of persons on the registers of these offices at 15th March was 1,936. I cannot state the number of women who were refused standard benefit, but during the period 25th August. 1925, to 8th March, 1926, 486 applications for extended benefit from men and 169 from women were recommended for disallowance by the local employment committee for this area.

Mr. PALING: In view of the fact that the right hon. Gentleman says these training centres have been so successful, is it his intention to continue them and to increase them?

Sir A. STEEL-MAITLAND: Certainly, it is my hope that they may be continued. A regards their extension, there is the question of finance, and it is a question which would have to be considered by the Government generally. But as to the continuation of these centres, and their good effect, I think there is no doubt whatever.

EX-SERVICE MEN (TRAINING, SOUTHWARK).

Colonel DAY: 17.
asked the Minister of Labour whether any offers of training facilities have been made to the disabled ex-service men unemployed in the borough of Southwark; and what facilities exist for the transfer of ex-service men from Southwark to the training establishments in the provinces under the administration of his Department?

Sir A. STEEL-MAITLAND: I assume that the hon. Member refers to training of disabled ex-service men under the industrial training scheme. This scheme was closed to ordinary applications on 30th September, 1921, but in individual cases of hardship applications are still considered on merits. Free travelling facilities to the training centre are provided for disabled ex-service men accepted for training under the scheme.

Mr. JOHNSTON: Will the right hon. Gentleman undertake to warn any of these ex-service men who leave their homes for his training centres, that if they should be unfortunate enough to die on his hands and if their mates take up a collection, the right hon. Gentleman's Department will appropriate that collection in order to pay the burial expenses?

Sir A. STEEL-MAITLAND: I have not any information which would make me agree to give such a warning. If the hon. Member has any case in his mind, perhaps he will communicate with me.

Mr. JOHNSTON: Is the right hon. Gentleman not aware that this morning he sent me a letter justifying such a case at Kirkcaldy?

Mr. PALING: What does the right hon. Gentleman mean by "ordinary application"? Is it not a fact that there are thousands of these applications coming in still each year, which are being turned down?

Sir A. STEEL-MAITLAND: I am not aware that there are thousands coming in each year, but when everybody has had ample notice to send in applications, of course a time limit of sonic kind has to be imposed. That was imposed long before the time when I became responsible for the Department and was accepted by each successive Minister, but occasionally peculiar cases, presenting
particular features, arise, and therefore this power of discretion to waive the rule is given.

Mr. T. WILLIAMS: Did not the right hon. Gentleman's Department estimate last year for at least a 50 per cent. reduction in these cases?

GROCERY AND PROVISION TRADE BOARDS.

Mr. TAYLOR: 21.
asked the Minister of Labour on what grounds he decided to abolish Grocery and Provision Trade Boards?

Sir A. STEEL-MAITLAND: I would refer the hon. Member to the reply given to the right hon. Member for Central Edinburgh (Mr. W. Graham) on 11th February, of which I am sending him a copy.

Mr. TAYLOR: Is it not a fact that that refers to reports which are not yet published, and is there any reason why the Minister should not state to Parliament the ground upon which he has taken his decision?

Sir A. STEEL-MAITLAND: Broadly speaking, the facts, as far as I could ascertain them, did not warrant the continuance of the board.

Mr. PALING: Can the right hon. Gentleman give the House any idea as to when the reports are likely to be published?

Sir A. STEEL-MAITLAND: Again I am speaking from memory as to the date, but in the course of this month. I think it is.

Mr. MACKINDER: In view of the disgraceful wages which are being paid in the shops in some of these industries, will the right hon. Gentleman not reconsider his decision to do away with this board?

PALACE OF WESTMINSTER (WORKMEN, DISCHARGES).

Mr. ROBINSON: 31.
asked the Under-Secretary of State for the Home Department, as representing the First Commissioner of Works, what is the number of electricians and other workmen engaged on the Palace of Westminster who have
been discharged since let January, 1926, and also the number of men under notice; and whether, in view of the many dilapidations, he will suspend the notices and press forward the work that requires to be done?

Captain HACKING (for the FIRST COMMISSIONER of WORKS): The number of men discharged on completion of work at the Palace of Westminster since 1st January, 1926, is 36, and four are under notice. No funds are available this or next financial year to enable the Department to re-employ these men on other work at the Houses of Parliament.

Sir WILLIAM DAVISON: About how many men are now employed?

Captain HACKING: I cannot give complete details, but the budding operatives number 125.

INDIA (STATE RAILWAYS).

Mr. JOHNSTON: 39.
asked the Under-Secretary of State for India what are the net profits on the operations of the State railways of India during the past financial year, and what part of this net profit has been transmitted to the Indian State treasury for the relief of taxation?

The UNDER-SECRETARY of STATE for INDIA (Earl Winterton): The net profit from the Indian State Railways in 1925–26 is now estimated at about £6,500,000, and the contribution to general revenues at about £4,000,000.

SILK DUTIES.

Miss WILKINSON: 40.
asked the Chancellor of the Exchequer whether he is aware that small silk articles which used to come from France in two days by letter post are now taking as long as 12 days to come through, although duty at the highest rate has been tendered; and whether he can make arrangements to facilitate the handling of small packages of silk goods?

The FINANCIAL SECRETARY to the TREASURY (Mr. Ronald McNeill): As my right hon. Friend explained on the 9th March, in reply to a question by the hon. Member for Huddersfield (Mr. J. Hudson), there is a standing prohibition
against the importation of dutiable articles by letter post, and any goods so imported are liable to forfeiture, though in the case of the silk duties, in common with all other new duties, some latitude has been allowed in this matter. If the hon. Member has a particular case in mind, and will send me details, I shall be glad to have inquiry made.

Miss WILKINSON: Does not the right hon.. Gentleman think that there should be some kind of revenue office in the North to facilitate the handling of these small packages, instead of their being sent to their destination and then having to be sent back to London?

Mr. McNEILL: I shall be very glad to receive any suggestions from the hon. Lady.

Mr. MACKINDER: Is the right hon. Gentleman aware that statements are being made that the Customs at Dover is quite inadequate to deal with this work?

Mr. McNEILL: I cannot say what statements have been made.

Mr. HARRIS: Would it not be better to sweep away these duties altogether?

—
Converted into5 per cent. War Loan, 1929–47.
Approximate Amount outstanding.





£
£


5 per cent. National War Bonds, Series I
…
…
82,086,000
163,288,000


5 per cent. National War Bonds, Series II
…
…
110,619,000
122,283,000


5 per cent. National War Bonds, Series III
…
…
118,917,000
189,820,000





Converted into 4 per cent. War Loan, 1929–42.



4 per cent. National War Bonds, Series I
…
…
16,905,000
79,987,000


4 per cent. National War Bonds, Series II
…
…
5,284,000
37,386,000


4 per cent. National War Bonds, Series III
…
…
2,785,000
20,613,000

SAFEGUARDING OF INDUSTRIES.

Brigadier - General Sir HENRY CROFT: 37.
asked the President of the Board of Trade how many applications have been made by industries for consideration under the Safeguarding of Industries Act; and how many industries have actually been granted the benefit of the Act?

UNITED STATES GOLD BONDS (CONVERSION).

Sir FREDRIC WISE: 41.
asked the Chancellor of the Exchequer the amount of the conversion of 5½ per cent. United States of America gold bonds into Five per cent. National War Bonds, Series IV, 1929; and the amount remaining for redemption?

Mr. McNEILL: The amount of bonds converted down, to the 27th February, 1926, was $128,355,900, and the amount outstanding on that date was $20,023,200.

NATIONAL WAR BONDS (CONVERSION).

Sir F. WISE: 42.
asked the Chancellor of the Exchequer the amount of conversion of holders of Five per cent. National War Bonds of Series I, II, and III, into Five per cent. War Loan, and Four per cent. National War Bonds of the same series into Four per cent. War Loan; and the total of each series remaining?

Mr. McNEILL: The total amount of these bonds converted to the present date is £336,596,000, and the amount outstanding £613,377,000. With my hon. Friend's permission, I will circulate the detailed figures in the OFFICIAL REPOET.

Following are the figures:

Sir B. CHADWICK: I presume my hon. and gallant Friend refers to the procedure under the White Paper issued in February, 1925. The number of definite applications made thereunder, so far, is 36; and the number of cases in which import duties have been imposed is five.

Sir H. CROFT: In view of the fact that the imports of manufactures into this country give employment to more foreigners than the total of unemployed in this country, will ills Majesty's Government get on with its policy?

Sir B. CHADWICK: There is the procedure laid down, and that procedure is open to be followed by those who are concerned.

Sir H. CROFT: May I ask whether the policy of His Majesty's Government is not to encourage industry to be safeguarded?

Sir B. CHADWICK: The policy of His: Majesty's Government, as far as I understand it, is to encourage industry as far as they possibly can.

Mr. A. V. ALEXANDER: Can the hon. Gentleman say how many applications have been favourably reported upon by the Committees and then turned down by the Board of Trade?

Sir B. CHADWICK: I cannot say.

Mr. MARDY JONES: Has there been any application for safeguarding from the mining industry?

Mr. HARRIS: Are we to understand that the only ones who did not succeed in making their case before the Committees were those who could not prove their case?

Mr. SPEAKER: That is argumentative.

ROYAL AIR FORCE.

LIFE-SAVING CLOTHING.

Colonel DAY: 28.
asked the Secretary of State for Air the results of the recent experiments and demonstrations of the new life-saving clothing; and whether it is intended to supply such life-saving equipment to the Royal Air Force?

The UNDER-SECRETARY of STATE for AIR (Major Sir Philip Sassoon): The recent demonstration, to which I think the hon. and gallant Member is referring, of certain flying clothing which would also keep the wearer afloat in the water, gave promising results, but a good deal of modification would be necessary before the clothing could be considered suitable
for Service use. Two modified suits have been ordered, and these will be tested in due course.

Colonel DAY: Can the hon. Gentleman say how many different kinds of suits were tested?

Sir P. SASSOON: Two suits have been ordered for testing purposes.

WADDINGTON AERODROME.

Mr. HADYN JONES: 29.
asked the Secretary of State for Air what was the sale price of Waddington aerodrome, near Lincoln; whether it has been decided to re-purchase it; if so, at what price: and what is the estimated cost of reconditioning it?

Sir P. SASSOON: As the answer is somewhat long, and contains a number of figures, I will, with the hon. Member's permission circulate it in the OFFICIAL REPORT.

Following is the answer:

The answer to the first part of the question is £31,274 16s. 10d., this being the total cost to the purchaser not only of the buildings, plant and material, which were Government property, but of the land, which was not, but which was purchased on his behalf in connection with the disposal transaction. Some of the land, buildings and material included in the transaction were subsequently sold off by the purchaser, leaving the nett cost to him at £22,078 18s.7d.. As regards the second and third parts of the question, the aerodrome has now been reacquired from the purchaser for the above-mentioned sum of £22,078 18s. 7d., to which must be added£220 for some land which he had sold off and £825 for additional land, making a total cost price of £23,123 18s. 7d. As regards the last part of the question, the estimated cost of reconditioning, including the erection of certain new buildings, power plant, water supply, roads, etc., is £70,000. I may add that to provide equivalent accommodation on an entirely new site would entail an expenditure approximately 80,000 in excess of that involved at Waddington.

WORKMEN'S COMPENSATION (APPORTIONMENT).

Mr. HAYES: 30.
asked the Attorney General what decision has been arrived at
with regard to the representations received by the Lord Chancellor from County Court Judges on the question of apportionment of compensation payable under the Workmen's Compensation Acts, is view of the method of calculation of eligibility for benefit under the Widows,' Orphans' and Old Age Contributory Pensions Act?

The SOLICITOR - GENERAL (Sir Thomas Inskip): I have been asked to reply. I am informed by the Lord Chancellor that he has not received any representations from County Court Judges on the subject dealt with in the question.

Mr. HAYES: May I send some to the hon. and learned Gentleman?

The SOLICITOR-GENERAL: I shall be very glad to pass them on to the proper I Department.

AGRICULTURE.

SMALL HOLDINGS (ADMINISTRATION PAYMENTS).

Mr. HAYDN JONES: 32.
asked the Minister of Agriculture what is the total sum paid by the Ministry in salaries and expenses during the last financial year to clerks of county councils of England and Wales acting as clerks of agricultural and small holdings committees, land agents, d rectors of agriculture, accountants, and their respective staffs; and the total amount of legal fees paid during the same period?

The MINISTER of AGRICULTURE (Mr. Guinness): As the reply is rather long, and contains a number of figures, I propose, with the hon. Member's permission, to circulate it in the OFFICIAL REPORT.

Following is the answer:

The Ministry does not make any payments to County Councils specifically in respect of Council's administrative expenses of the nature indicated in the question. In regard to small holdings the Ministry pays the losses—that is, the excess of expenditure over income each year up to 31st March, 1926—incurred by Councils in administering the Small Holdings Acts. During the financial year to 31st March, 1925, the Ministry
made payments by way of recoupment of such loss to the aggregate amount of £898,772 16s. 6d. The expenditure by County Councils for administrative expenses in respect of that year amounted approximately to £157,943.

In some counties—24 out of the total of 62—the County Agricultural Committee also conducts the County Administration of Agricultural Education. As in the case of small holdings, the Ministry does not make payments specifically in respect of administrative expenses. Grants are made on the basis generally of two-thirds of a Council's total approved expenditure including administration. The total approved expenditure on agricultural education for 1924–25 by all counties, irrespective of the question whether the service was administered by the County Agricultural Committees or otherwise, amounted to £252,690. During the same year, the Councils' administrative expenses in connection with agricultural education amounted to £27,466, towards which the Ministry contributed twothirds—namely, £18,310.

In addition to the above, grants are made to County Councils in respect of various other small services amounting in 1924–25 to £258 5s. 3d.

I have no information as to the amount paid by County Councils by way of legal fees.

HUMANE KILLERS.

Mr. RENNIE SMITH: 34.
asked the Minister of Agriculture whether he is aware that, owing to there being no humane killer on board the cattle ship "Manchester Producer," attempts were made to kill the animals by repeated blows on the head with a small hammer, and that the cattle went down under the blows but stumbled up again; and whether he will make regulations compelling all cattle ships to carry humane killers?

Mr. GUINNESS: I am informed that the "Manchester Producer" did not carry a humane killer, but the captain was provided with a revolver for the purpose of killing any animals which it might be necessary to slaughter on the voyage. Under the weather conditions prevailing it was impossible to use a revolver without danger, nor could a humane killer, which is in effect a pistol,
have been employed. The storm met by the "Manchester Producer" was of exceptional severity and the losses of cattle in consequence were without precedent. Since 1910 approximately 850,000 cattle have been carried across the Atlantic with a total loss of 1,705, or approximately two per thousand. Exceptional as the circumstances may have been, they suggest that the conditions under which cattle are brought across the Atlantic are not entirely satisfactory, and I am instituting an inquiry into the Regulations governing the trade.

Mr. BUXTON: Even without waiting for a prolonged inquiry, and in view of the liability to very serious breakages of the barriers, would it not be reasonable forthwith to insist that humane killers should be carried?

Mr. GUINNESS: I understand that the liners concerned do carry humane killers, but as a matter of fact in this case a revolver would have been equally humane. The difficulty is that when the ship is in a very heavy sea, out of control, and water breaking over the decks it is impossible to secure the animals. The crew cannot get the necessary foothold to use any method of slaughter.

Mr. BUXTON: Yes; but is it not the case that on this occasion the complaint is that the humane killers were not to hand or they would have been used? As we know, they are much safer to use than a revolver.

Mr. GUINNESS: My information is that the conditions were such that humane killers could not have been used. It. is absolutely necessary to secure the animals.

Mr. T. WILLIAMS: Can the right hon. Gentleman tell us whether it would be possible to use the ordinary mediæval system of the hammer when they could not use the humane killer?

Mr. GUINNESS: It was not a question of the mediæval system of the hammer: it was a question of using the revolver.

Sir JOSEPH NALL: Would the right hon. Gentleman have regard to the great difficulties under which the crew laboured in view of the conditions indicated?

Mr. GUINNESS: Yes, while I am as anxious as any one to avoid suffering, I must remind the House that this was the same storm in which the "Antinoe" was lost, and that human beings were unavoidably put to even greater sufferings than those of the animals.

TRANSPORT.

UNCLASSIFIED ROADS, HOUGHTON-LE-SPRING.

Mr. R. RICHARDSON: 35.
asked the Minister of Transport if he is aware of the large number of Class 3 or unclassified roads that are extensively used for heavy motor traffic in the Houghton-le-Spring rural district area; and if he proposes to give further aid to the authority in their effort to maintain and widen such roads?

The MINISTER of TRANSPORT (Colonel Ashley): I have recently issued a Circular to local authorities inviting them to submit applications for assistance to roads in rural areas. I am sending the hon. Member a copy of the Circular. The provision for these roads will be increased in the next financial year, as the hon. Member is no doubt aware, by an additional £750,000 for unclassified roads.

ROAD STONE.

Lieut.-Colonel ACLAND-TROYTE: 36.
asked the Minister of Transport whether in making grants from the Road Fund, he makes it a condition that British stone only shall be used; and, if not, whether he will do so in the future?

Colonel ASHLEY: For an explanation of the policy of my Department in respect of the use of British road stone, I would refer my hon. and gallant Friend to the answers which I gave on 22nd March, to the hon. Member for Central Hackney (Sir R. Gower) and on 23rd March to the Noble Lord the Member for the Shrewsbury Division (Viscount Sandon). I am sending him copies of these answers. I am not prepared to make it an absolute condition of grant from the Road Fund that British road stone alone should be used.

Commander WILLIAMS: When this stone does come from abroad, will the right hon. Gentleman see that there is a Fair Wages Clause in the contract?

Colonel ASHLEY: That might be for consideration.

FRANCHISE (WOMEN).

Mr. TAYLOR: 44.
asked the Prime Minister when the conference on the extension of the franchise to women on the same terms as men is likely to take place?

The PRIME MINISTER (Mr. Baldwin): I would refer the hon. Member to the answer which I gave yesterday in reply to a question on this subject by the hon. Member for Shoreditch.

The following new Departments or Branches have been created in the Ministry of Agriculture and Fisheries since 1914:—

Department or Branch.
Duties.
Approximate cost during current financial year (see footnote).




£


Welsh Department
Administration of the principal branches of the Ministry's work in Wales and Monmouthshire, including those relating to small holdings and allotments, County Agricultural Committees, Education, Improvement of Live Stock, Horticulture and Small Live Stock. Advises the Ministry in other matters affecting Wales and Monmouthshire.
17,100


Research Advisory and Machinery Branch
Administration of grants to Agricultural, Horticultural and Veterinary Research Institutes and grants in respect of advisory work at Agricultural Colleges and University Departments of Agriculture in plant pathology, agricultural chemistry, veterinary science, agricultural economics and dairy bacteriology. Supervision of appointment, salaries and conditions of employment of research and advisory officers, and programme of research work. Administration of scheme for the award of post graduate scholarships for intending agricultural organisers, teachers and research workers.
5,622



Arrangement and co-ordination of experiments and demonstrations on general agricultural questions, and supply of technical advice to inquirers, who cannot be answered through the medium of advisory officers. Conducts tests of agricultural machinery and advises on agricultural machinery and engineering. Administration of schemes for the correlation of meteorological conditions with crop growth and for the cultivation of flax. Business in connection with hop control.



Building and Estates Management Branch.
Management of properties (farm settlements) acquired in England for the settlement of ex-service men on the land, under the Small Holdings (Colonies) Acts, 1916 and 1918, and the Sailors and Soldiers (Gifts for Land Settlement) Act, 1916.
14,529



Examination of plans, tenders and contracts of County Councils for building work on small holdings provided under the Small Holdings and Allotments is Acts, 1908–19; making of surveys, preparation of plans and carrying out of building work for the Ministry's Farm Settlements. Administration of the Improvement of Land, etc., Acts, and of the Settled Land Acts.

MINISTRY OF AGRICULTURE (NEW BRANCHES).

Mr. HAYDN JONES: 33.
asked the Minister of Agriculture what new Departments have been created in the Ministry of Agriculture since 1914, their duties and respective costs?

Mr. GUINNESS: With the hon. Member's permission, I will circulate in the OFFICIAL REPORT a statement giving the desired information.

Following is the statement:

Department or Branch.
Duties.
Approximate cost during current financial year (see footnote).




£


Land Drainage Branch
Matters arising under the Sewers Acts and Laud Drainage Acts, including the making of Orders, and Administration of the Ministry's powers under the Land Drainage Act, 1918. Questions relating to the reclamation of land for agricultural purposes.
8,537


Labour Branch
Questions affecting agricultural labour, and particularly the administration of the Agricultural Wages (Regulation) Act, 1924, including the secretarial work of the Agricultural Wages Board and the 47 Agricultural Wages Committee and the securing of the proper observance of the minimum rates of wages fixed under the Act.
31,931


Markets and Co-operation Branch
Questions connected with co-operation and the marketing of agricultural produce generally; conduct of investigation into the methods of marketing such produce.
11,704



Granting of loans to co-operative societies. Administration of the British Sugar (Subsidy) Act, 1925.




Questions relating to agricultural credit and particularly in relation to the Agricultural Credits Act, 1923. Formation and administration of Agricultural Credit Societies under Section 2 of this Act.



National Stud (Live stock Branch).
Breeding of high-class thoroughbred horses
33,000*


NOTE.—The figures given in this column represent the administrative costs of the Department or Branch i.e., salaries, travelling and incidental expenses, but do not include the proportionate part of the general services expenditure (Establishment, Registr., Finance, Typing, Cleaning, etc., which have not been separately assessed). The figures are also exclusie of expenditure borne on the Votes for other Departments, i.e., for office accommodation, printing, stationery, postages, etc.


*Receipts are, however, expected to amount to £39,500, i.e., £6,500 more than the payments

CASH-ON-DELIVERY SERVICE.

Captain ARTHUR EVANS: 46.
asked the Prime Minister if the House will have an opportunity of debating the policy of cash-on-delivery postal service; and whether he will consent to receive a deputation of local traders on this question?

The PRIME MINISTER: This matter can be raised on the Consolidated Fund Bill. In reply to the last part of the question, I do not think that any useful purpose would be served by receiving such a deputation as the views held by traders on this subject were already before the Government when the matter was under consideration.

Captain EVANS: Is the right hon. Gentleman aware that a majority of the local traders in this country who were opposed to this, Measure feel that they have been ignored, and that they have no opportunity of placing their views before
the Postmaster-General; in view of din would the Prime Minister be so kind as to ask the Postmaster-General to receive a deputation on the matter?

Miss WILKINSON: Will the Prime Minister also realise that many women regard this reform with the greatest approval, and that it is not merely the traders who ought to be considered?

Mr. A. V. ALEXANDER: Is the Prime Minister aware that certain bodies of traders have never been consulted at all in this matter, and that they regard it as very high-handed action?

The PRIME MINISTER: There is always a great difference of opinion when any reforms are proposed.

KENYA (MASAI TRIBE).

Mr. JOHNSTON: 43.
asked the Secretary of State for the Colonies whether
the Report on the alleged rising of the Masai, which has been published in Kenya Colony, will he made available in this country before the Colonial Office Vote is taken?

The SECRETARY of STATE for the COLONIES (Mr. Amery): I hope so. As was explained in reply to the hon. Member's question of 8th February, it was decided, for good reasons, not to include past disturbances in the inquiry of the Committee.

Mr. JOHNSTON: Is it not the case that references to past disturbances have been published in the Report which has been issued in Kenya?

Mr. AMERY: I am not sure on that point.

Colonel WEDGWOOD: If this matter has been published in the Report in Kenya, can we not also have it here?

Mr. AMERY: I am not sure of that; I would like to look into the matter.

Colonel WEDGWODD: Why should not a Report which is good enough to be published in Kenya also be published for the benefit, of this House?

Mr. AMERY: It is a. matter of printing and other considerations; it is not a question of what is good enough for Kenya being good enough for this House. It is what use or interest the publication may be to hon. Members.

Mr. RILEY: Could copies be placed in the Tea Room?

Mr. AMERY: I will consider that.

BALLOT FOR NOTICES OF MOTION.

CIVIL SERVICE.

Sir HENRY CRAIK: I beg to give notice that on this day three weeks, I shall call attention to certain features in the organisation of the Civil Service, and move a Resolution.

TRADE WITH CHINA.

Captain FAIRFAX: I beg to give notice that, on this day three weeks, I shall call attention to Trade with China, and move a Resolution.

HOUSE OF LORDS.

Sir HENRY COWAN: I beg to give notice that., on this day three weeks, I shall call attention to the Powers and Constitution of the House of Lords, and move a Resolution.

STATE OF TRADE.

Mr. HAMMERSLEY: I beg to give notice that, on this day three weeks, I shall call attention to the State of Trade, and move a Resolution.

MESSAGE FROM THE LORDS.

That they have passed a Bill, intituled, "An Act to authorise the Company of Proprietors of the Birmingham Canal. Navigations to close their wharf, known as the Old Wharf, in the city of Birmingham, and to sell the same and the site thereof; and for other purposes." [Birmingham Canal Bill [Lords.]

Also, a Bill, intituled, "An Act to reduce and re-arrange the capital of the Serle Street and Cook's Court Improvement Company; to change the name of the company; and for other purposes." [Serle Street and Cook's Court Improvement Company Bill [Lords.]

And also a Bill, intituled, "An Act to authorise the Brompton, Chatham, Gillingham, and Rochester Waterworks Company to construct new works and to raise additional capital; to change the name of the company; to consolidate and convert the existing capital of the company; and for other purposes." [Brompton, Chatham, Gillingham, and Rochester Water Bill [Lords.]

Birmingham Canal Bill [Lords],

Serle Street and Cook's Court Improvement Company Bill [Lords],

Brompton, Chatham, Gillingham, and Rochester Water Bill [Lords],

Read the First time; and referred to the Examiners of Petitions for Private Bills.

STANDING ORDERS.

Resolutions reported from the Select Committee:
1. "That, in the case of the Swindon Corporation Bill, Petition for additional Provision, the Standing Orders ought to be dispensed with: That the parties be permitted to insert their additional Provision if the Committee on the Bill think fit.
2. "That, in the case of the Mynyddislwyn Urban District Council Bill, Petition for additional Provision, the Standing Orders ought to be dispensed with: That the parties be permitted to insert their additional Provision on condition that the approval of the Bedwellty Council and of the electors of the Bedwellty urban district under the Borough Funds Act is obtained: That the Committee on the Bill do report how far such Order has been complied with.

Resolutions agreed to.

DONCASTER CORPORATION BILL.

Reported, with Amendments; Report to lie upon the Table, and to be printed.

HOUSE OF COMMONS (KITCHEN AND REFRESHMENT ROOMS).

Special Report from the Select Committee brought up, and read.

Report to lie upon the Table, and to be printed.

Orders of the Day — CONSOLIDATED FUND (No. 1) BILL.

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a Second time."

INTER-ALLIED DEBTS.

Mr. SNOWDEN: I desire to take advantage of the opportunities which this Bill affords to call the attention of the House to the question of Inter-Allied Debts. It is rather remarkable, in view of the importance of this subject and its important effect on the financial position of this country, that the House of Commons has hitherto given so little attention to the consideration of the matter. There have been, it is true, perfunctory references to the question in the course of general debates, but I do not remember any occasion upon which the subject has been exhaustively discussed. It is still more remarkable that the Chancellor of the Exchequer in the exhaustive review he gave last week of the financial position of this country, made no reference whatever to the indebtedness of some of our Allies in the late War.

The CHANCELLOR of the EXCHEQUER (Mr. Churchill): I was dealing with expenditure, not with revenue.

Mr. SNOWDEN: The right hon. Gentleman interrupts me to say that he was dealing with expenditure and not with revenue. By-and-by the right hon. Gentleman may discover that there is a rather close connection between expenditure and revenue. The right hon. Gentleman on that occasion expressed considerable concern in regard to the balancing of expenditure and revenue, yet he made no mention whatever of the fact that there is owing to us from certain Continental debtor countries a sum which, were it paid, would relieve the right hon. Gentleman of all financial embarrassment. For two or three years after the close of the War I believe that no communications took place between this country and her Allies in the late War in regard to these inter-Allied debts. Just over three years ago the United
States of America—to whom we were in debt for loans contracted by us, but not for ourselves, during the War—addressed to the British Government a rather abrupt communication dunning this Government for the payment of those debts. Later, the then Chancellor of the Exchequer visited the United States and concluded a funding arrangement with that Government. Up to the present nothing, I believe, has been received on account of the debts, owing to us, unless the right hon. Gentleman a week ago received the first instalment of £2,000,000 of the Italian debt.

Mr. CHURCHILL: I did.

Mr. SNOWDEN: You did. Well, I think the right hon. Gentleman might frame that cheque and hang it in his room at the Treasury as a memento of his great achievement. As matters stand at present, we are owed about £800,000,000 by Russia, nearly £700,000,000 by France, £600,000,000 by Italy, and about £100,000,000 by the smaller European States. That makes a total of indebtedness due to this country of about £2,100,000,000. When the American dunning note, as I described it, was received by the British Government, the then Foreign Secretary, Lord Balfour, addressed a communication to our Continental debtors intimating to them that we were called upon to pay our debt to the United States and asking that they should give consideration to the payment of their debts to us, and he reminded them that our debt to the United States was incurred not for ourselves, but for others. The Balfour Note, as it has come to be known, is worth a moment's consideration, for it laid down certain conditions upon which the British Government would be prepared to treat with their Continental debtors. I have before expressed my own opinion that the terms of the offer in the Balfour Note were far too generous. But during the two or three years or more since that Note was issued, it has been accepted as the basis of British policy in regard to the treatment of these debts.
France, as I said, owes us just under £700,000,000, and Italy, £600,000,000. About half this money, roughly, was borrowed from the British investor at 5 per cent., and a little less than half was borrowed from the United States at that
time, I believe, at 5 per cent. If we had payment of the interest upon the £1,000,000,000 borrowed from British investors and lent to Continental States we should be receiving £50,000,000 a year. We are paying annually to the Unitel States a sum of about £34,000,000, rising ultimately to £38,000,000, upon a debt which, under the arrangement, which has been made, will be liquidated in 62 years from the date of the funding of the debt. If we funded our own claims for War debts on the same terms that we are paying to America, we should be getting £84,000,000 a year from our continental debtors, and we should be paying a maximum of £38,000,000 a year to the United States. That would leave us with a net gain of £46,000,000 a year, which is equal to 11d. in the £ on the Income Tax. I especially commend that fact to hon. Members opposite, who never cease declaring that the present heavy Income Tax is one of the greatest handicaps from which British industry suffers at the present time. Under the Balfour Note we are not asking for that 84,000,000 but for £38,060,000. Under the terms of that Note we should be content to get from German Reparation, Italy, France and our other continental debtors, a sum sufficient to meet the annual tribute we have to pay to the United States of America.
The Chancellor of the Exchequer made two attempts last year to come to an arrangement with two of our Continental debtors, France and Italy. Those who have followed this great question somewhat closely will know what has been the attitude of the French public and the French Press, and the Italian public and Italian Press in regard to their alleged indebtedness to Great Britain. Their argument has been that these debts were contracted as a general obligation and should be shared out between the Allies in proportion to their capacity to pay and the wealth of each. They say that Great Britain is a rich country, while France and Italy are poor, and therefore Great Britain should shoulder the cost of the War. When the French Finance Minister returned home last year, after the arrangement made between him and the Chancellor of the Exchequer, there was a great outburst of protest in the French Press against the terms which had been arranged, and
the whole of the argument in the French Press was that instead of France being a debtor to Great Britain, as a matter of fact Great Britain ought to be a debtor to France, because they contend that we have done very well out of the War.
One of the points made by them was that the British loans had been incurred in the form of war munitions and war materials, that the British manufacturers had made immense profits in this way. and that the British Government had appropriated a very considerable portion of those profits through a heavy Income Tax and by means of Excess Profits Duty. In regard to our debt to America, the Continental Press now tells us that Great Britain has actually made a profit out of the funding of our debt to the United States of America. We have been told that this has improved our credit and the pound sterling and cheapened the cost of imports; indeed, if I remember rightly, all those arguments were put forward in the exhaustive review of the financial position of France issued by M. Clementel about 18 months ago. If that be so, if we have made a profit, and if it has proved to the financial advantage of this country to fund the American debt upon the terms on which it was funded, then the moral of that is that France should be anxious to fund her debt upon the same terms.
It is alleged that we have gained by the funding of the American debt, and exactly the same argument has been urged by the Italian public and the Italian Press. There is a famous Italian economist, Senator Einuidi, who is a very prolific writer in magazines and newspapers, and he has written a great deal upon this subject. He says that England was enormously indebted to Italy, and he conveys the impression that Great Britain is guilty of sharp practice in asking Italy to pay. What is the case against France/ France owes us, with accruing interest, £700,000,000, and she has made no attempt to meet that obligation. The financial record of France, during the last seven years particularly, is one of the most discreditable records in the history of national finance. France made a claim which she submitted to the Reparation Commission estimating the material damage which had been done by the War at just under £3,000,000,000. It is very interesting to examine some of the items
which go to make up that huge total. The average cost which she put in that claim for the destruction of peasant houses and workmen's cottages was £2,275, and she also put down an average of £1,170 for the loss of the furniture of those cottages. She estimated the damage done to her coalmines in the devastated areas at £80,000,000, which was far more than the total capital value of all the coal-mining properties in France.
Now let us turn to taxation. I know quite well, and I unhesitatingly admit, that it is rather difficult to make exact comparisons as to the taxation per head in different countries, because there are a number of factors which one ought to take into consideration; but still, a very broad comparison may, I think, be justly made. I remember giving an answer, when I was in office, upon this question, and I made that reservation, but I think the broad comparison is this: If we take that year, 1924, Great Britain was paying in taxation £718,000,000, and France was paying £235,000,000. The Bankers' Trust of the United States has issued—I do not know if hon. Members are acquainted with it—a very voluminous work upon this question of Inter-Allied Debts, in which this comparison is made: per capita, Great Britain is paying 50 per cent. more than France, and 100 per cent. more than, Italy. But another comparison might be made. If France were paying taxation, per head of her population, at the same rate as Great Britain, she would be taxing her people £340,000,000 a year more than she is doing at the present time.
That same work points out that at the outbreak of War the total capital wealth of France was £12,000,000,000, and that of Great Britain £15,000,000,000; and certainly, the capital wealth of France is not less to-day than it was before the War. She has been enjoying, during the time of our unparalleled trade depression, a period of unparalleled prosperity. Both her imports and her exports are much beyond the pre-War figures in volume—not merely in value; she has no unemployment; she has spent enormous sums in industrial reconstruction, as everybody who has visited France in recent years knows quite well. She has, I repeat, never faced the question of taxing her people to meet her national financial requirements. She had no Income Tax
before the War, and her Income Tax now is perfectly farcical. According to the last return, there were only about 30,000 people in France assessed at incomes of over £1,000 a year, and only about 216 who were assessed at over £10,000 a year, whereas in Great Britain we have 25,000 people assessed at over £5,000 a year. M. Briand was quite right, therefore, in what he said when he met the fate, so common to French Ministers, of a defeat in the Chamber on this question of the refusal of the Chamber to levy this taxation. M. Briand said that the French people had an ineradicable indisposition to pay taxation.

r. CHURCHILL: I think he said. that that particular Chamber had.

Mr. SNOWDEN: Well, he might have, said that Chamber, but, in that respect, the Chamber were representative of the feelings and sentiments and disposition of the people of France. If France would tax her people as we are taxed in this country—it would not he necessary to tax to the extent that we are taxed in this country—she could very well afford to pay in full the debt that she owes to this country. The same is true of Italy. I think I remember a statement made by the Chancellor of the Exchequer, at the time of his negotiations with the Italian Finance Minister, about the prosperous condition of Italy. The trade of Italy is booming; Italy is becoming a very severe competitor of this country, particularly in the various departments of the textile trade; and, by permitting these countries, France and Italy, not to pay their debts, by imposing upon the British taxpayer the annual sums which these countries ought to pay, what we are doing, in effect,. is to subsidise, out of the pockets of the British taxpayers, the severe competition. of France and Italy against British goods.
We are now, as I have said, paying to America £34,000,000 a year, and that will rise to £38,000,000 a year. May I again translate that into terms of Income Tax, because the Income Tax is a matter of such touching interest to the Party opposite? The amount that the right hon. Gentleman has to find for the payment of the American Debt represents. 9d. in the £ upon the Income Tax, and will do for the next 60 years. Now, America is a friendly country, and I do not want to say anything which could be
regarded as either disrespectful or disagreeable to that great country, but I want to put the facts. America entered the War 2½ years after the outbreak of war, and, during that time, she had been very busily and very profitably engaged in making war material for the Allies. The work on Inter-Allied Debts to which I have referred, published by the Bankers' Trust of New York, makes these two statements:
American bankers, merchants and manufacturers, and transport interests, profited to the extent of over three billion dollars from French disbursements in the United States alone.
4.0 P.M
It goes on to say that during that time the Allied countries spent in the United States of America £2,400,000,000 upon war munitions. After two and a-half years America decided to enter the War. She did so, judging by all the statements that were made by President Wilson and other American Statesmen, in a great altruistic mood. In recommending the Congress to declare War, President Wilson said:
 We have no selfish aims to serve. We desire no conquest, no Dominion. We seek no indemnities for ourselves, no material compensation for the sacrifices we shall freely make.
It was in that kind of altruistic mood that the United States entered the War. It was recognised that for some time she would not be able to do much by supplying men for the fighting front. She declared that the best service she could render to the Allied cause would be to act as the Allies' banker. In the official Bulletin issued by the American Treasury in connection with the raising of the war loans there, it was stated that the loans were essential to American intervention, not alone in a military way, but "for our economic protection and welfare." If it were necessary for the protection and the welfare of the United States of America to enter the War in 1917, it was equally necessary for her to do so in 1914. But for two and a-half years she had remained outside. She had profited greatly, she had vastly enriched her purse, and by delaying her entry into the War she had saved two and a-half years' loss of life of American soldiers. These are things which ought to be taken into consideration. It was generally agreed, and indeed stated—quotations in
support of it could be furnished—at the time that this loan was given to our Continental Allies through us, that it was a gift by the United States of America as a sort of compensation for her late arrival upon the scene of battle. However, the bond is theirs, and, if the United States insists upon it, then we must pay. That burden of £38,000,000 a year will require to be shouldered by the people of this country for nearly 60 years more. America. has been much more successful than we have in regard to the funding of her foreign indebtedness. She has already funded 40 per cent. of that indebtdness.
I come now to the Italian debt, which amounts to about £600,000,000. At 5 per cent., and assuming that the money we lent to Italy was raised in this country—I will make a distinction by and by between one-half of the total debt and the other half, because the funding of our debt to America at a slightly lower rate of interest makes some difference—it means that the taxpayers' of this country are paying £30,000,000 a year upon the Italian debt. If that were funded on the terms that America has exacted from us, that is about 4 per cent. with interest and sinking fund, it would amount to £23,000,000 a year, and in 62 years Italy would pay £1,500,000,000. Somebody will have to pay that, and. if Italy does not pay, then the taxpayers of this country will have to pay. The right hon. Gentleman has concluded an agreement with the Italian Government. There is no provision in that agreement for the payment of a single penny of interest. Italy is to pay, upon the average for the next 62 years, £4,000,000 a year. That means that altogether she will pay about £250,000,000. The cost of that to us, as I pointed out a moment ago, funded upon the terms of the American debt, is £1,500,000,000. The difference between these two figures is the burden which for the next 62 years will rest upon the shoulders of the taxpayers of this country. That means that of the Italian debt Italy's payments will be about one-sixth, and the British taxpayers five-sixths.
I know the difficulty of the Chancellor's position. I think hon. Members will agree that I am not to-day at all vicious with the right hon. Gentleman. I have not said one bard word about him. I
want this afternoon to be helpful, and to see if anything that the House of Commons can do can strengthen his hands in dealing with these recalcitrant debtors. But the right hon. Gentleman, commenting upon this agreement with the Italian Finance Minister, said that the settlement could not be judged by arithmetical calculations. It is just by arithmetical calculations that we must judge it.

Mr. CHURCHILL: Not wholly.

Mr. SNOWDEN: It cannot be. wholly judged by arithmetical calculations. Italy is paying a paltry £4,000,000, and the British taxpayer, as I say, will have to pay in these years £1,250,000,000. Let me turn to the French debt and the provisional agreement that the right hon. Gentleman made with M. Caillaux last August. The right hon. Gentleman a week ago, in reply to a question I put to him, told me that he regards that agreement as still standing. There is very little evidence that the opinion of the Chancellor of the Exchequer is shared by the French Government. They appear for the time being to be busily engaged trying to raise some £30,000,000 or £10,000,000 in order to, balance their budget. Now what was that agreement? It was to be £12,500,000 spread over 62 years. One point was never made clear. It was never made clear whether the payment of that £12,500,000 was to begin at once or whether there was to be a moratorium. M. Caillaux, on his return to France, said something about a moratorium until 1930. That, however, is not a material point. It was to be £12,500,000 for 62 years. We are paying on the French debt £35,000,000 a year, provided by the British taxpayers. Again, translated into terms of Income Tax, that is over 7d. in the £. Over 62 years, on the French debt, we shall pay £2,100,000,000, or £1,300,000,000 more than we are going to get from France.
This is the position in regard to the Italian debt and the French debt. Taking the French debt at 5 per cent. over 62 years, we shall have to provide £2,100,000,000 and we get £800,000,000 from France. That leaves our loss on the French debt over the 62 years, on the terms of the provisional agreement made last summer, at £1,300,000,000. Now suppose we take the Italian debt on the American funding terms. In 62 years,
we shall have to provide £1,500,000,000 for the service of the Italian debt. We get £250,000,000, and we lose £1,250,000,000. Taking the two together, we shall on the Italian debt and under the provisional agreement with France have to provide—the Exchequer of this country will have to provide—in addition to the receipts from these two countries on account of the loan, £2,500,000,000 in 62 years. In other words, the Italian debt is going to coat about 5d. on the Income Tax, and the French debt an equal amount. That is about 11d. in the £. for these two debts, which is just about the figure at which the Income Tax stood in days before the War.
According to the Balfour Note, this country would be satisfied if it received from German reparations and from other continental debtors a sum of £38,000,000 a year. The Chancellor of the Exchequer will get £4,000,000 under his Italian agreement. If the French agreement be carried out, he will get, sometime, £12,500,000 a year. That is £16,500,000. We are getting about £10,000,000 from Germany. Under the Dawes scheme, if it matures, we may sometime get £20,000,000. But that is very doubtful indeed. Four million pounds from Italy, £12,000,000 from France, £10,000,000 from Germany—that is £26,000,000, so that when the £38,000,000 on the American debt matures, we shall, on these terms, be about £12,000,000 a year to the bad.
I want to ask the Chancellor of the Exchequer a question, and I hope, when he replies, he will give me an answer. He supplemented the Balfour Note by a Note which he sent to France, in which he said that there must be pari passu payments made by France or any of our continental debtors; in other words, if they made terms more favourable with one of their other debtors, we should expect to revise our agreement with them, so that we should get a proportionate benefit. I wonder if the right hon. Gentleman still stands by that condition, because I find no embodiment of it in the Italian Agreement. The right hon. Gentleman, no doubt, will say that he did the very best he could, but it is very difficult indeed to believe that he could not have made better terms both with France and with Italy. The settlement with Italy is simply trivial in the extreme.
The right hon. Gentleman said that it was not merely a matter of arithmetic. There were other considerations to take into account. There is no doubt about it that political considerations had a good deal to do with the Chancellor of the Exchequer assenting to the Italian Agreement.

Sir W. DAVISON: What about the Russian debt? Will the right hon. Gentleman give us an analysis of that?

Mr. SNOWDEN: A question was put to the Foreign Secretary to-day suggesting that negotiations might be opened up with Russia. Ever since this Government took office they have refused to open up negotiations, and if ever really practical negotiations were entered upon between Russia and this country I should advocate, as I am advocating now in regard to the French and Italian Debt, justice to this country before magnanimity to another country.
It is a pity—and I think everyone agrees with this—that at the time of the Armistice, and during the peace negotiations, there was not an all-round agreement for an all-round cancellation of these debts. America, of course, was the obstacle, but now that we have funded our Debt to America, unless the United States is prepared to annul that agreement, we are bound to make the best terms we possibly can with our own Continental debtors. No doubt in the course of this Debate the question will be raised of the difficulty of effecting transfers. No one knows better than the hon. Gentleman opposite (Sir F. Wise) that this question was most exhaustively considered, discussed and reported upon in the Dawes Report, and their conclusion is that up to a certain point, and within limits, these sums can be transferred without any injurious effect upon the exchange of that country or any dislocation of the trade of the receiving country. The Chancellor of the Exchequer will say, no doubt., he has done the best he could. It is no use him saying, and it is no use the French saying, and it is no use the Italians saying, they are unable to meet their obligations to a greater degree.
It will need a great effort to mobilise their economic resources, but it is high time the French particularly abandoned their inherent unwillingness to pay taxes.
They have been presenting during the last few months a contemptible spectacle to the whole world, and the failure to tax themselves is bringing France to the verge of national bankruptcy. There may be certain temporary advantages, and one of the things that has been done is to wipe out about four-fifths of the French public debt, and in that process a large number of British investors have suffered very severely through French financial policy. I remember that M. Clementel, in the report to which I have referred, suggested a Dawes scheme for the treatment of Inter-Allied indebtedness. The crux of the Dawes scheme is the financial control of a country by its creditors, and if France wishes to avoid that unpleasant and humiliating experience she might secure the object of the Dawes scheme by her own effective control of her great resources. I said I desired that the purpose served by this Debate should be to strengthen the hands of the Chancellor of the Exchequer. The provisional arrangement made with the French Minister last year is, for the moment, so much waste paper. If the time comes when the French resume negotiations I hope the Chancellor of the Exchequer will not be bound altogether by the terms he made then. He would have sufficient justification for asking for their revision on terms which will do less injustice to this country. I began by saying this question was one of great importance to the taxpayers of the country. We have since the War made unparalleled sacrifices to maintain the fabric of our financial institutions. We have redeemed nearly £1,000,000,000 of our debt. We have maintained a far greater rate of taxation than that borne by any other of the Allies. I think, therefore, we are fully justified in asking that these debts should be funded upon much more advantageous terms from the point of view of this country than the Chancellor of the Exchequer has so far succeeded in doing.

Mr. CHURCHILL: The right hon. Gentleman has drawn attention to the remarkable fact that we have not, so far this Session, devoted any portion of our Parliamentary time to a discussion of the important and at one moment very timely topic of Inter-Allied War debts. I agree with him in that reflection, but it is no cause of reproach against His Majesty's Government. We follow naturally in the
main the wish of the Opposition parties as to the subjects that should be set down for discussion. I have been ready from the beginning of the Session to deal with this question, and I am ready to do so to-day. Nor do I complain in any way of the tone and temper in which the right hon. Gentleman has couched his searching and critical remarks. He indulged, it is true, in some strictures on friendly foreign countries with which, even in so far as I might in a private capacity have some feelings of agreement, it would be impossible for me to associate myself during my occupation of a position as an official functionary. But I do not find myself in fundamental disagreement on any matter of serious principle with the right hon. Gentleman in many of the arguments he has used. I think, with him, that this question of debts ought to be treated, not in isolated discussion on this or that particular country, but surveyed as a whole. The right hon. Gentleman went back into the past, and I will follow him there.
There has been from the very beginning of these controversies a very marked difference of view in Great Britain and the. United States in regard to War debts. We have never taken the view that the cost of shot and shell fired in the common cause can be considered morally and sentimentally, whatever it may be legally, as on exactly the same footing as ordinary commercial debts. That has always been our position. It was the British position more than 100 years ago, after the Battle of Waterloo, and it is certainly the standpoint from which we first approached this subject. We said we were willing to cancel all debts owing to this country by our Allies, provided we were treated in a similar manner by those who were our creditors. That view did not commend itself to the great Republic across the Atlantic and, as the right hon. Gentleman has very truly said, we received more than one insistent demand to fund our contracted debt. This being so, we were, of course, bound to comply. Whatever views may be entertained on sentiment or on policy, the right of the creditor is indisputable. There can be no question of the lawful right of the creditor, or that the United States are entirely within their full legal rights in taking the view they do of contractual obligations entered into with themselves. We were forced, there-
fore, to adopt a position different from that which our own instincts and historical traditions had naturally suggested.
We then come to the Balfour Note, under the administration of my right bon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George). I was always a sincere believer in the principles of the Balfour Note, and I was very glad to be able, in the first speech I made to this Parliament in my present office, to re-affirm it in the most explicit manner. What are the principles of the Balfour Note?

Mr. J. JONES: No advance without security.

Mr. CHURCHILL: I think the hon. Member may guess again. The principle was that we should not take or ask, not only in debts but in reparations, more than was paid by us to our creditors across the Atlantic. That was our principle. We adhere to that principle and, as far as possible, we are endeavouring to give effect to it. We have, in carrying out that policy, to take into consideration the capacity of the individual debtors to pay, and also what is fair and right towards individual debtors who make genuine and spontaneous efforts to redeem their obligations.
There is no difference about the general policy of the Balfour Note. The only questions which arise in connection with it in this country are these: Will it be attained; how far shall we fall short of it; have we taken the best measures to secure its attainment? On this I would like to make a general observation. Our critics must really make up their minds where they stand in the computation of the actual bargaining power possessed between debtors and creditors, when these are represented by great nations and States. You cannot put a great nation in. the County Court and levy a distress warrant upon its property, movable and immovable. On the other hand, every civilised State has an immense interest in obtaining from its creditors a full, free and honourable discharge from its contractual obligations. Without such discharge the credit of the debtor is gravely undermined.
As everyone is beginning to find out—without excepting in this connection
even Russia, to which the right hon. Gentleman referred—the business of the modern world is conducted on credit. Money is only a token. Gold is only a guarantee used for the adjustment of margins. The great credit operations by which alone the wealth of the modern world can be sustained and augmented, and by which alone the concentrated population of modern times can be maintained in their present numbers, depends upon the use of credit, which exceeds ten-fold—perhaps twenty-fold—the actual disposable physical money: Therefore, the direct control of the creditor over the debtor depends upon the view of the debtor as to the importance to that particular nation of world credit.
We always have in this country our own unbroken tradition of never defaulting, which is reinforced by the consideration of practical interests to which I have referred. That is the power of the creditor over the debtor. That is the extent, the practical extent, of his means of collecting debts. The same critics who argue that we should have refused to pay our debt to the United States, are, when criticising the British Government, ready to argue that we can compel our debtors to pay us whatever we choose to fix as an appropriate sum. That is, inherently, illogical and even irrational. If we can repudiate our debts to others, others can repudiate their debts to us. If we can compel our debtors to pay whatever we think right, our creditors can compel us to pay them whatever they think right. Actually, therefore, the power of the creditor is limited, as I have said, not only by the debtor's capacity to pay, but by the debtor's view of the importance to him of world credit.
The right hon. Gentleman made a calculation, which he had, no doubt, carefully worked out, to show that the settlements which had been effected, and provisionally and partially effected with France, involved a permanent loss to this country of £2,000,000,000 in all. Then he preceded to speak of the sort of arguments that were used in France and Italy from their point of view, and how different it is from our point of view. He gave their public view of the different transactions which have taken place. We have to consider how far apart the view of the right hon. Gentleman—with his
£2,000,000,000, additional which he says we ought to have obtained—is from the views of these other nations with whom we have negotiated and with whom we are still in negotiation, whose views he has put so clearly before the House this afternoon. In that connection, I should like to say that it is one thing to ask and another thing to get. It is very easy to make a demand for all you want. It is possible, perhaps, even to get paper agreements which do not command the assent of the debtor, or which are disproportionate, on any long view, to the debtor's interest as regards world credit. Such paper agreements may be found to be no more valuable than the actual signed contractual obligations which we at the present time hold and which are being continually renewed. Such paper agreements may look very well. They may raise a cheer. They may be hailed with a series of eulogistic leading articles, but in the end they will prove illusory if they transgress or exceed those practical limits which I have endeavoured to describe.
With these general observations, let me come to the actual field of War debt payments and War debt collection by Great Britain. I am not considering in this field the different points that arise in regard to reconstruction debts or relief debts; I am dealing only with War debts, and what I have said applies only to War debts and their special position. We have undertaken to pay what the United States so insistently and incessantly demanded. That involves upon us a charge of £33,000,000 at the present time, rising in, I think, seven years to £38,000,000. That is to say, putting it broadly, we have to pay, the British Chancellor of the Exchequer and his successors in a long line have to pay, about £100,000 a day every day for more than three generations to the United States.

Mr. J. JONES: And we won the War!

Mr. CHURCHILL: That is a stupendous operation. To transfer, to pass that immense sum continuously across a frontier, across an ocean, across the Exchange, is one of the most stupendous tasks and burdens ever undertaken by any country in the whole financial history of the world. That is one side of the picture.
Now I turn to the Balfour Note and to what has been our attitude towards our Continental debtors. I do not wish to impart any heat or arty controversy of a disagreeable character into the discussion, but here I must say that in this task of obtaining the beet possible terms from our Continental debtors we have been compromised and hampered by the attitude of both the two great Opposition parties in this House. In the first place, we have the declaration of the Leader of the Liberal party, Lord Oxford, in 1921. All these statements are read abroad. Every word that is said in these Debates on these topics is studiously read abroad, and, if it is of a nature favourable to the claims of a foreign country, it is not forgotten. It forms a definite part thereafter of their controversial and argumentative case.

Mr. J. JONES: As universal as Charlie Chaplin.

Mr. CHURCHILL: I hope the hon. Member will allow me to proceed, without interruption. What did Lord Oxford, then Mr. Asquith, say on 26th October, 1921?
The first thing is to get rid as between the Allies in the late War of their indebtedness one to the other. Wipe it off the slate it will be none the worse in the long run.
In August, 1922, he said:
 If I were Budgeting in would write them off.
He was referring to the debts of our Continental Allies.
 They are not good debts, not from any want of honour or good faith on the part of those who incurred them …they are not in a position to redeem their obligation. To remit, in my opinion, is not an act of magnaminity in the least. It is an act of good business."—[OFFICIAL REPORT, and August, 1922; col. 1752, Vol. 157.]
In the same speech he spoke of the United States not having
 any obligation, moral or even sentimettal.''—[OFFICIAL REPORT, 3rd August, 1922; col. 1753, Vol. 157.]
to induce them to remit their debt or any pare of it to us. That is a very hard doctrine. It is idle to suppose that a declaration of that kind, made by an ex-Prime Minister, an ex-Chancellor of the Exchequer, a man of European and world-wide reputation, the undisputed leader of one of the great parties in the
State, can be made without playing its part in subsequent events and international discussion. Then there is the view, the well-known view, of the Labour party. Again and again they have said that they are against the collection of war debts. A statement was made by the right hon. Gentleman the Member for Seaham (Mr. Webb), the late President of the Board of Trade, which was quoted by the Prime Minister in the opening Debate of this Session, and never since contradicted.

Mr. JOHNSTON: Yes, he has contradicted it. He says he is incorrectly reported.

Mr. CHURCHILL: Does he say that he never said anything at all to the "Tribuna" newspaper, or does he say that the "Tribuna" newspaper has misrepresented what he said?

Mr. JOHNSTON: He denies what he is reported as having said in the "Tribune." Newspaper.

Mr. CHURCHILL: I was quite. unaware of what the hon. Member for Stirling (Mr. Johnston) states until this moment. Naturally, I accept what is said on behalf of the right hon. Member fey Seaham at once, and I will drop my argument on that point; but why is it left to the hon. Member to make this correction after all these weeks have elapsed? Here is a statement of the utmost importance, which, if it were true, would unquestionably be admitted as having hampered the negotiations, and which would unquestionably have stultified the official Opposition in this House in regard to this question. The utmost publicity was given to the quotation by the Prime Minister, who used it in the most formal way in the opening Debate of the Session. The whole House heard it and cheered and laughed at it, and the right hon. Member for Seaham, after all these weeks, has never taken an opportunity of correcting the Prime Minister or of informing the House that the statement was one which did him great injustice. However, that is settled, and we know now that that statement is denied. Therefore I will not attempt to dwell upon it any more. But I do not think it will he denied on the Opposition benches that the general
attitude of the Labour party, declared again and again, has been unfavourable to the pressing of these War debt claims.

Mr. SNOWDEN indicated dissent.

Mr. CHURCHILL: Then am I to understand that at the present time the Labour Party is fully associated with the Balfour Note? I understand that if there is any complaint it is, in the words of the right hon. Gentleman, that the Balfour Note is too generous. It certainly is very generous, and I think to that extent we are in general agreement.
Now let us see what we have done in the process of collecting these debts. The right. hon. Gentleman mentioned, in the first place, Russia. He said Russia owed us £800,000,000. Russia has repudiated her War debts as well as her civil debts, but, perhaps this is not the last word that we shall hear from Russia. Things are changing in Russia. The importance of world credit to that vast community is dawning upon the rulers of that country. We do not abrogate any of our claims, but this I do say, that if at any time the initiative in raising this question comes from Russia we should not treat Russia with less consideration than we have treated other debtors.
Now I come to Italy and to the Italian debt settlement. I could a little contrast. the attitude of the right. hon. Gentleman and his party in regard to the debt position towards Italy with the extremely tolerant and almost oblivious attitude which they have adopted towards Russia. And then all that we have heard about France surely has another application. France, which bore the brunt of the War and which has proposed to make an honourable debt settlement with this country, was held up by the right hon. Gentleman as being guilty of having the most disgraceful financial record in history, or words to that effect. I will not push the application of those words to a conclusion which would undoubtedly irritate hon. Gentlemen opposite, but this I will say that they ought to follow a definite principle in regard to this attitude towards these debts. They must not attempt to deal with these debts on the basis of likes and dislikes and say, "One form of government or movement we admire, therefore we will say nothing
about debts. But another form of government we dislike, therefore we will immediately extract the uttermost farthing." That is not a principle upon which any advantageous course of action could be taken by His Majesty's Government.
The Italian capacity to pay has been considered by our experts to be about one-third of that of France. That is the broad calculation which we have made. The right hon. Gentleman quoted some Italian professor with whose name I am not familiar. He described how this professor said he really thought that, if we looked at matters truly, we should find that England owed a debt to Italy, and that Italy owed nothing to England. That is not the view of the Italian people or of the Italian Government. They have an entirely different view. They have accepted the view which we take, that their capacity to pay is one-third of that of France, and they have agreed to pay us £4,000,000 a year for 62 years, and they have agreed to pay that, not contingent on the reparations which they may receive from Germany, but on the sole credit of Italy itself. That is a point to which we attach a great deal of importance. No political consideration of any kind entered into the fixing of this sum, except that genera! political consideration to which I have referred, namely, the long friendship between Great Britain and Italy, unbroker at any time in the history of the two, countries. That and our comradeship in the War—both these considerations were certainly borne in mind by myself and by my colleagues in the Cabinet. But no political bargaining, interest or engagement of any sort or kind was entered into at any time or at any point during these negotiations and discussions.

Mr. J. JONES: And then the organ-grinders went home!

Mr. CHURCHILL: I really hope that those who are reporting this Debate will not carry some of the hon. Gentleman's observations and interruptions to foreign countries, because they give an altogether inadequate view of the heights of wit and humour to which he can at times attain. One of the questions that has been raised is: how does the Italian debt settlement compare with the settlement which Italy has made with the United States; how is it comparable on the
pari passu principle? Of course, when we made the settlement with Italy, we had before us the settlement that had been effected between Italy and the United States; therefore no condition about pari passu required to be inserted such as was agreed upon in the negotiations with M. Caillaux. But how does the Anglo-Italian settlement compare with the American-Italian settlement.? If, you look at it as a purely arithmetical calculation, there is no doubt that Italy is paying what by present values is proportionately a much smaller sum than she has agreed to pay to the United Stages.
But you must bring into these matters other considerations. The payment which Italy is to make to the United States begins by being a very small sum indeed, and for many years the payments remain on a very low level. It is not until 20 years have passed that the aggregate pal meats which they will have made to the United States become bigger than the figure which they will have paid to us, making allowances far the pro rata calculations. When you get to the sixtieth year, immense payments will be made by Italy amounting, I think to £16,000,000 in a single year, to the United States. It just depends what your general view is and whether you take the long view of all these War debt agreements and arrangements. If you are quite sure that three generations hence these immense payments will be made by the Italian people and by other debtors all over Europe to the United States, then, of course, it is undoubted that our bargain is r of so favourable as is the one which the United States have effected. If, on the other hand, you attach more importance, to the payments which are to be made in the first 20 years, then we may say that we have fully maintained the principle of pari possu.
There is another criticism which has been made about the Italian debt settlement. It is this, that France would use the terms granted to Italy as a means of re-opening the basis of agreement reached with M. Caillaux in August last. But that, criticism has already been disposed or by the declarations which are reported to have been made by the new French Minister of Finance, M. Raoul Péret. He has stated that I correctly interpreted the position when I said that we regarded
the Caillaux arrangement as a binding one, and that it is on that basis that he will proceed when he is able to visit us.

Mr. ASHMEAD -BARTLETT: That agreement has never been ratified.

Mr. CHURCHILL: If my hon. Friend will bear with me, I will explain a little more about the agreement. M. Péret has said that it is on the basis of the August agreement—a partial agreement which did not cover the whole held—that the Government of which he is at present a member, and of which M. Briand is a member, as he was of the Government in which M. Caillaux was Finance Minister, it is on that basis that they are willing to resume negotiations.

Mr. LLOYD GEORGE: Will the right hon. Gentleman kindly tell us what the agreement is?

Mr. CHURCHILL: That is exactly what I am going to do, because I think that this is the moment. When the August negotiations were completed, M. Caillaux left here with the intention of returning in a very short time to consider outstanding points, and therefore it was only necessary to state the main principles of the agreement which was reached, namely, the discharge by France of her liabilities by 62 annuities of £12,500,000 on the sole credit of France. That was the basis of the agreement. But there were three points—one at least of which presented, and still presents, a difficulty—which were outstanding and which we were to have dealt with, if M. Caillaux's ministerial life had been spared, in a subsequent discussion. The first of these points related to the exchange. It was that a certain elasticity should be given in making payments, that a year's delay or something of that kind might be allowed if it could be shown that the passage of the payments over the exchange unduly compromised the exchange. [Interruption.] There is something here to be discussed, and neither from the French nor from the British point of view does it afford any foothold for hilarity.

5.0 P.M

Colonel WEDGWO: How could it possibly fail to affect the exchange even worse if the £12,500,000 were postponed for another year, so that it became a question of transferring £25,000,000?

Mr. CHURCHILL: The right hon. Gentleman, I think, is confusing different parts of the argument. I am not now dealing with the date on which payments are to begin. There was a proposal by France—I am telling the House what were the outstanding points—there was a proposal that a certain elasticity in the dates of payment should be allowed. There is in the arrangement between Great Britain and the United States a provision for a certain elasticity, on exchange grounds, in the payments, and we have inserted a provision of that kind in the Italian Agreement. But the elasticity asked for by M. Caillaux seemed to go beyond that, and we did not arrive at a form of words which seemed satisfactory. The second point was this: The full figure, £12,500,000, was not to be reached until 1930; it was to be reached by a series of steps. That is what M. Caillaux calls a moratorium, but in our discussion it was called the échelle, or ladder, by which payments were to advance until they reached the full figure. We had our view of what those payments should be, and we put our view before the French Minister. He neither accepted it nor rejected it, but I was left under the impression that, if everything else were satisfactorily adjusted, there was not likely to be any serious difficulty upon that point. It was part of the arrangement that any sums that are not paid in the first five years are added to the subsequent annuities, so that the central position of 62 annuities of £12,500,000 a year will be unimpaired.
Then there was the final point of difference and one which certainly presents the most serious difficulty. We had assented to so low a figure as £12,500,000 as a basic figure of the annuities, on the understanding that it should be upon the sole credit of France and not contingent upon reparations. There was a certain alternative proposal, under which a small portion would have been contingent upon Dawes annuities, and the rest upon the credit of France, but the French Minister held most strongly to the view that, in the event of a total failure of German reparations, France could not be expected to continue these payments. That seemed to us to take away on the one hand what we had stipulated for on the other band. I must not underrate the serious nature
of this difference of opinion. It is unsettled at the present time. On the other hand, the contingency is not one on which one need anticipate—the contingency of the total failure of Dawes reparations—but still that remains a very definite obstacle to the conclusion of this agreement.

Mr. WILLIAM GRAHAM: The right hon. Gentleman did not make it clear that that also included France's payment to the United States of America. We did not stand alone on that part of the controversy.

Mr. CHURCHILL: I am not speaking about France's payment to the United States. I am speaking only of what the French Minister said, that he could not give assent unless there was some protection for France in the event of a total failure, or practically total failure, of German reparations. But still, while this difference appeared to be a serious one, it is not one which we believe would prevent the effecting of a speedy and satisfactory agreement. Then, of course, there was the provision about which the right hon. Gentleman asked me, which we call the pari passu provision—that if France made an arrangement subsequently with the United States, on the War Debt, which was more favourable than the one which she had made with us, our arrangement was to be improved in our favour accordingly and proportionately. So much for the arrangements with France. I hope to see the discussions renewed at an early date. The House will readily understand why it is that I have not been able to carry the matter forward in the six months that have elapsed. We have also made certain settlements with minor Powers, particularly Rumania. Some of these I have announced to the House; I read out to the House a long list of all the different settlements that we had made, but some of them related to debts which were not of a purely war character.
Now let us see how matters will work out in future on the basis of the Balfour Note. We expect to obtain £12,500,000 from France. We have a firm undertaking from Italy of £4,000,000. We estimate what may be collected from the minor Powers at, say, £2,000,000. If Germany pays three-quarters of the full
annuities under the Dawes scheme, which seems to be a perfectly prudent and reasonable basis on which to found ourselves, that will be £15,000,000.

Mr. SNOWDEN: Three-quarters of the maximum.

Mr. CHURCHILL: Three-quarters of the c maximum. Therefore, on this computation, which is a reasonable view of what may be obtained in the near or not two distant future, we should be receiving £33,500,000 a year. We are at present paying £33,000,000 a year to the United States. Probably by the time that all this is fully gathered in, we shall be paying the £38,000,000, or be within a few years of having to pay it. There is a gap, a margin, which perhaps some day Russia may be anxious to At and rate, there is a place for her. In surveying the situation as a whole, whatever may be said about our paper claims, I do not think that we are so far from having achieved the principle and objects of the Balfour Note that we can regard our declarations in that respect as having been nugatory. We might easily at an earlier period have reached a less favourable conclusion.
There is only one more remark which I wish to make, and that is on the general future of these debts. It is a very remarkable fact that at the present moment the amount that the United States is receiving from Europe under arrangements which have already been made is approximately equal to the whole amount of reparations which Germany is paying. But the distribution of the receipts from Germany and the payments to the United States is entirely different. The bulk of the receipts from Germany go to France, who at present is making no payments on account of her War debts, and the bulk of payments to the United states are made by this country largely out of our own resources. But the day is coming at no great distance when this situation will undergo an obvious modification. When France as well as Italy has funded her debts, both to this country and to the United States, and when the minor Powers have all funded their debts, then it is quite clear that the United States will be receiving, directly and indirectly, on her own account from reparations, from Italian sources, balanced against reparations, from
British sources, from French sources through British hands, from Italian sources through British hands—by all these various channels, indirectly or directly, America will be receiving by far the larger part, at least 60 per cent., of the total probable reparations of Germany, and the first reparations, the first 60 per cent., as it were, which will be payable by Germany. That is the last thing I have to say on this subject.
It seems to me an extraordinary situation that will be developed—that by all these chains and lines and channels, the pressure of debt extraction will draw reparations through the different channels from the devastated and war-stricken countries of Europe, which will flow in an unbroken stream across the Atlantic to that wealthy and prosperous and great Republic. I believe that these facts will not pass out of the minds of any responsible persons, either in the United States or in Europe.

Sir JOHN POWER: I believe it is customary for a new Member, in addressing the House for the first time, to claim indulgence, which is readily and heartily accorded. There is a tendency to approach this matter from the commercial side rather than from the side of other considerations which have been dealt with by the Chancellor of the Exchequer. I think the word "debt" is probably the reason why we have all got into the habit of looking on War indebtedness as entirely a commercial transaction, whereas it seems to roe that there are many qualifying considerations which take it entirely out of the category of commercialism. We in this country are, perhaps, more to blame than those in other countries for that state of affairs, because we have had in these matters great experience which has not been accorded to those newer countries which have achieved their greatness entirely by industrial and commercial means and have only the commercial side of the question presented to them. Our experiences in regard to money advances to other countries for the purpose of prosecuting a common war are many and varied. They go back, I suppose, to the time of Elizabeth. In any case, there is no doubt that grants of money to our Allies in various Continental wars were in the beginning treated purely and simply
as grants and not as debts. The making of grants to Continental Allies has been defended many times in the House of Commons. It was defended in early days on the ground that we could do better for the common cause by putting our money into a pool than by using it to send our own soldiers to the Continent in days when it cost £1 to keep a Continental soldier in the field, where it would have cost at least £2 to keep a British soldier in the field. At the beginning of the Napoleonic Wars we gave our Allies grants of money, or subsidies, or gifts, or whatever you may call them, and there was no question of indebtedness. Towards the end of those wars we found ourselves under heavy financial stress and we endeavoured to turn one of those grants—that to Austria—into a war loan, and just about 100 years ago in this House we were discussing how best to drag out of our former Allies this money which we called a debt. We found it impossible to do so, and in the end the debt, so-called, was practically cancelled.
The experience of those days is very largely the experience of to-day. No matter to what terms your allies may consent under the pressure of war and of national necessity when they are fighting for their lives, once the war is over, both victors and vanquished are equally exhausted financially, and it is impossible that they should pay. Therefore, I would look upon the question of inter-Allied indebtedness as one which is not in any way a commercial question. There are many instances to support that view. Of these numerous instances I will quote but one. At the beginning of the War, Russia made an attack in East Prussia in order to divert German troops from the Western Front, She did not particularly want to do so, but she did it, and the result was she met her fate at Tannenberg and suffered enormous losses including, I think, the whole of her artillery and munitions. She did that in order to give us time on the Western Front, and she had to be re-equipped with weapons of war which were supplied by the Allies. That being a bookable transaction was charged against her, and to-day forms part of her War indebtedness.
I think if it had not been our misfortune to need the aid of the United States in the War, we should not be here to-day discussing War debts. America has had
no experience in these matters, and she treated the subject, as one would expect from a nation of commercial people, on a commercial basis. She did not understand that great declaration of which I am sure every subject of this country is proud—the Balfour Declaration—which said that no matter what anyone else might do, as far as we were concerned we should not enter into any series of transactions to drag out of our War Allies money which had been expended in the common cause, and that we should only require the debts owing to- us to be met to the extent to which we had to pay to the United States of America. I am sure none of us can think of that Declaration, that attempt to remove the paralysing influence of War debts from human effort, without a feeling of pride. It is fitting, however, that the question of the complete cancellation of the War debts should be raised by Great Britain rather than by those nations who have not been able so far to meet their obligations. I know that in saying so I voice the overwhelming opinion of my fellow countrymen, and also a very large and influential body of opinion in the United States, representing the best class and the best type of the people there. It is a feeling which is growing, and anyone who goes to the United States will corroborate what I say. The opinion is growing, not only there but all over the world, that now the War is over and we are in times of peace, it is time we gave up fighting on these financial matters and got back to normal conditions.
If America were less prosperous than she is to-day, one might have a certain amount of diffidence in suggesting that she should do anything which might, perhaps, injure her. But an examination of the figures shows that America is well able to agree to a complete cancellation of the War debts. The figures of the American export trade for the five years ending June, 1914, were 11,000,000,000 dollars; for the five years during the War up to 1919 they were 29,000,000.000 dollars; and for the five years up to 1924, when Europe was endeavouring to struggle back to peace, they were 25,000,0001100 dollars. Therefore, the expansion of trade of the United States during the 10 years of War amounted to no less than 33,000,000,000 dollars, or more than one and a-half times the entire United States debt. In other words, the export
trade of the United States grew up like a mushroom in the night, fertilised and nourished by the bloodshed in Europe. Tae economists are all agreed that war indebtedness benefits no one, and injures equally the lender and the borrower. If we agree with those who have made this subject a special study, it is obvious we cannot continue these payments to the United States without doing great injury to ourselves and probably in the end equal injury to her industries.
It seems extraordinary that this question has not, been more thoroughly understood by the United States. After all, the United States claims to be a nation o ideals, but her action in laying under tribute the nations of Europe is paralysing oar industry here and keeping us in a slate of impoverishment. The prosperity which we find overwhelmingly in the 'United States, is measured by the impoverishment of the nations of Europe. In other words, the former prosperity which was distributed throughout Europe is now focussed in the United States. It is extraordinary that such a great nation, whose people have proclaimed time and again that they are idealists and wish to benefit humanity, should consent to the placing of this embargo upon our happiness. Again, the United States has not taken the share which one would expect a great Anglo-Saxon community to tike in the restoration of peace and prosperity in Europe. I refer to her objection to taking part in the constitution of the League of Nations. The League of Nations is the result of the inspiration of one of her great statesmen who proclaimed it in noble words,. But his follow countrymen have left it to Great Britain and other nations to translate those words into deeds. It is a great pity from the point of view of humanity in general, that the United States has failed to do her share in endeavouring to banish war and all its calamities, and, incidentally, I might remark, to banish for ever the profits of neutrality.
It has been said—with what is in my opinion a great deal of truth—that we were from the beginning fighting the battles of the United States in the late War. From the beginning, it was inevitable that the United States would have to come into the War, but she made no preparation. It might be argued that before America came into the War we were fighting her battles, but however
that may be, there is no doubt that after she came into the War, we were fighting her battles, and for one long year or more we held the position before she was able to put her troops into the field. That fact has not been recognised by the United States in the claim which she has made for her debt. Thousands of lives were sacrificed on the altar of United States unpreparedness during that year. She had plenty of time in which to prepare, but she made no move, and when War was declared, she had to stand by for that year idly and impotently—however great her goodwill—while we fought and held the field. Now we are asked to make an agreement which means that unborn generations in this country will pay to unborn generations in America, money which was borrowed and expended in order to fight the battles of the United States of America. I will not quote the words, already familiar, of President Wilson and of Mr. Secretary McAdoo, who declared times without number what would happen if Germany succeeded in the war that she was making upon them, but I will conclude by repeating that for a whole year after the United States came into the War we fought her battles, and if she spent money in the common cause, we scent the lives of the flower of our troops. We sacrificed thousands of lives for her, and there is no justification, in my opinion, for the United States demanding the return of the money contributed by her towards the common cause. As well might we ask the United States to return to us something which is infinitely more valuable than money, the lives of our fellow-subjects given in her defence.

Lieut.-Commander KENWORTHY: I am sure the House listened with great interest to the maiden speech of the hon. Member for Wimbledon (Sir J. Power), but although it was a maiden speech, I am bound to say that in it there was a great deal of the sort of talk which does infinite harm in other countries. The same arguments which the hon. Member used in order to reproach America, have been used by the French to the Chancellor of the Exchequer. The French say that the whole brunt of the War rested upon them, because we did not at the outset introduce conscription. I regret that this sentimental whine should be made, especially by an hon. Member belonging
to the Conservative party, which is supposed to be so strongly nationalist and patriotic, standing four-square to all the world. I listened to the hon. Member's speech with great pleasure, much as I disliked the sentiments he expressed, but when he talked about America keeping us impoverished and putting an embargo on our hapiness. I felt that surely that sort of inferiority complex did not represent the views of the greater number of the Members of his party. It certainly does not represent those of my own party, and I hope the hon. Member's expressions will be taken at their proper value in the United States of America. Thank heaven, we can still hold up our heads and we do not need to plead for mercy! For that reason, I have consistently recognised that the Prime Minister could have done no better when he made the settlement at Washington. I have information from the United States through relatives and others, and I learn that sentiment in the United States at the time was such that I do not think any better bargain could have been made. The right hon. Gentleman the Member for Colne Valley (Mr. Snowden) I thought wasted a lot of good powder and shot in scolding another nation. We do not get any further forward by drawing attention to the delinquencies of the French taxpayer. My criticisms are not directed against France, Italy, the United States of America, or Russia. My criticisms, such as they are, are directed against the right hon. Gentleman the Chancellor of the Exchequer. He talks about the pari passu arrangement that Italy was to make, the pari passu treatment of this country by its debtors. I am quoting his words in answer to a question put by the hon. Member for Peckham (Mr. Dalton) on the 17th November, but I wish he had taken into consideration the rate of payment of this country to America when in his negotiations with Italy he was asking payments from Count Volpi.
I cannot understand what he meant. when he said this afternoon that there were no political considerations and no political bargains in connection with this Italian settlement. I took his words down, and they took me very much by surprise, because I have here a verbatim account of the declaration that the right
hon. Gentleman gave, with much more freedom, I may say, as in most cases, to a party of journalists than he does when he addresses this House. We always get a good deal more information from his speeches outside, whether about the Budget, or debts, or anything else, than if he is speaking inside this House. He addressed a party of 40 to 50 journalists on the 27th January, and I quote from the report which appeared in the "Manchester Guardian." The same appeared in the "Daily Chronicle" and a number of other reputable newspapers. He was excusing himself for this remarkably lenient arrangement come to with Italy, an arrangement which, I really think, shocked public opinion in this country and surprised all observers very much indeed. He made certain excuses at the time of the settlement though he did not to-day, and he thought it necessary then to make some explanation, and he said to these journalists:
At the time of the imminent entry of the Ruhr, very considerable offers were made to Italy which carried with them, subject to a number of conditions which have not been fulfilled and are not operative, the principle of virtual cancellation of the overwhelming bulk of this obligation, and although it was not ever argued by Italy that anything of a legal nature or of a definite final nature had taken place, yet at the same time I have felt bound to consider what has happened in the intervening period, and which found no parallel in Italian-American relations—a factor which should reasonably be borne in mind.
Is that no political consideration? I asked the Prime Minister whether any such considerations had been present, and I must say he took the same view as the right hon. Gentleman has now taken.

Mr. CHURCHILL: Those considerations related to the past. Those were quite properly taken into account, but no bargain for political support or international support in the future was entered into.

Lieut.-Commander KENWORTHY: I see. When the right hon. Gentleman says he made no political bargain, he means only in the future, and we are to understand that there were political considerations in the past. That is quite a different thing, but that is not what he said just now in answering the right hon. Member for Colne Valley. But if there were no political considerations for the future—and I am very interested to hear
that; apparently the negotiations between the Foreign Secretary and the Italian representatives were in a vacuum and had nothing to do with these debt negotiations at all—then I must say there is still less explanation for his extreme leniency to Italy. I thought his agreement with France was unfavourable, highly unfavourable, to this country, but when the terms of the Italian settlement came out, I thought we had done rather well out of France in comparison. Might I ask the right hon. Gentleman if there is no sort of consideration for this country at all in exchange for forgiving Italy about 60 per cent. of her debt, because that is what it comes to? Are we to have no sort of consideration for out trade with Italy? Did not the right hon. Gentleman attempt in any way to get the barriers against our trade in the shape of tariffs lowered, or is he so much in love with tariffs, now that he sits on those benches, that he dare not even suggest another country lowering them?
Is he aware that the Italians are building a very great mercantile marine at the moment—subsidising it? I am not criticising them—they have a perfect right to do it—but when he talks about the Italian capacity to pay, is he aware that that is being done to the detriment of our shipping, in this way, that our shipping is being discriminated against in Italian ports, and to-day it is almost impossible for British ships to take Italian emigrants even to a British Dominion, but that they must be carried in Italian ships? Did he allow all this sort of thing to pass while he wiped out great blocks of the Italian debt to us? Good gracious! The right hon. Gentleman can talk about sentimentality and the Italian comradeship in the War, which we all appreciate, and he can say that you cannot assess the value of shot and shell supplied to fight our battles. He can talk, as the hon. Member for Wimbledon, in his very interesting maiden speech, talked, but while he is recognising these things and wiping off these great blocks of debt, does he ever think of the British commercial men and the British shipping companies which are trying at all costs to get trade somehow? Cannot he get us a little something in exchange for these very generous surrenders of the taxpayers' money? The right hon. Gentleman has, I am afraid, made an
extraordinarily hard bargain for us, and he, at any rate, is so recognised to have done in Italy. The comments in Italy on the morrow of the settlement were extraordinary. May I quote a paper, friendly, I am sure, to the right hon. Gentleman, namely, the Giornale d'[...]llalia, a very well-known and important paper in Italy That paper said:
These figures represent an indisputable triumph for Italy, greater even than she obtained at Washington when it is remembered that our debt to Britain exceeds our American debt by one-third.
Others talked of a great victory for Fascismo, and I suppose it, at any rate, was some comfort for the right hon. Gentleman that the Fascist system had proved so successful, even in negotiating with him. I think that altogther, however much the Italians may congratulate themselves on this bargain, we have little upon which to congratulate ourselves, and I consider that the British taxpayer has been shamefully let down by the right hon. Gentleman. I am, however, glad to find that he does not share the opinion of the right hon. Member for Colne Valley when the latter said that the agreement entered into with M. Caillaux was not worth the paper upon which it was written. I think that was an extraordinary thing for an ex-Cabinet Minister to say, standing at that Box, and I hope that some correction will be made. We surely are going to keep the French to that arrangement that was come to, subject to the modification described by the right hon. Gentleman. I would not be surprised, however, if the French demanded a paring down of their figures, in view of the extraordinary settlement come to by the right hon. Gentleman opposite with Italy, but as things are I hope that we, at any rate, will insist on their keeping to that arrangement, unfortunate and unsatisfactory as it is from our point of view.
I hope nobody will think that I criticise this settlement with Italy because of the form of government in Rome. That is entirely a matter for the Italian people, and if they like to tolerate a system of government which would not last 48 hours in this country, that is entirely their affair, and it is not for us in any way to complain. In the same way, if Italy chooses to subsidise her shipping, to discriminate against our mercantile marine,
and to erect tariffs against our goods, she has every right to do it, but why on earth did we not use this debt as our legitimate bargaining weapon to get some of these tariff walls against our trade lowered and, at any rate, to get decent treatment for our merchant ships? The same thing applies, to a great extent, to France. I do not join with the right hon. Member for Colne Valley in his strictures on France. It is not our place to scold the French people at all, but when we are discussing the very great sums owed to us by France, represented by French Treasury bills, I think we have a right to ask for fair treatment for our commerce. When we treat the French Treasury generously with regard to these debts, I think we should ask for something in return, and if it is impossible to get some concession with regard to our commerce, could we not ask for some political support in some of the projects that are necessary for this country? The Chancellor of the Exchequer has been called out of the House, but I would ask the Under-Secretary for the Foreign Office if, in return for these very generous settlements with France and Italy, in comparison with what we have to pay to America, we have secured any support in the forthcoming Conference on Disarmament? It would be perfectly legitimate to have got some promise of agreement with us to support our point of view in the forthcoming Disarmament Conference.
I cannot refrain from mentioning to-day that, while France is saying that she cannot pay more and she has been forgiven great blocks of her War debt, she is to-day building more submarines than the German Navy ever had building at anyone time before or during the War. We cannot overlook these facts, and I must repeat that I consider that the most vital interests of this country have been betrayed by the present Government in forgiving these great quantities of War debt without securing any corresponding advantages or concessions to us. I have taken this occasion to criticise what has been said by the right hon. Member for Colne Valley in one or two particulars, but I must say how much I admired his marshalling of the figures, and I do not wish to refer to figures at all in consequence. It was a most able summary, if I may be allowed to say so.
I must refute what the Chancellor of the Exchequer found it fit and proper to say in regard to my Noble Friend Lord Oxford. The right hon. Gentleman tore one or two sentences from a speech made by Lord Oxford in 1921, and held those words up to the ridicule of the House. Lord Oxford did say that it would have been better—I have not his actual words, but they will be within the recollection of the House—to have expunged all inter-Allied debts. Who really quarrels with that? That is laid down in our own official Notes. The Balfour Note has been quoted, and in that Note it is stated:
 The policy hitherto pursued by this country of refusing to make demands upon its debtors is only tolerable so long as it is generally accepted.
Lord Oxford suggested an all-round cancellation, which would have been very much better. I heard the same sentiment, I think, from the hon. Member for Ilford (Sir F. Wise) on previous occasions, in previous Parliaments, but Lord Oxford was held up to derision because he said the United States was within its rights in demanding payment. Let me quote the words of the Balfour Note:
 With the most perfect courtesy, and in the exercise of their undoubted rights, the American Government have required this country to pay the interest accrued since 1919 on the Anglo-American debt, to convert it from an unfunded to a funded debt, and to repay it by a sinking fund in 20 years.
The Balfour Note recognises the right of the United States. and the Chancellor of the Exchequer does not hold up Lord Balfour or the Cabinet which approved of that Note to derision, but he tears a sentence from the context of my Noble Friend Lord Oxford's speech, and attempts to ridicule it. What Lord Oxford said should have been followed up by the present Government and by its predecessors. It is a great pity, as has been said already in this Debate, that this whole matter could not have been considered as one problem with all nations, debtors and creditors, sitting round a table. As that could not be done, and as we had to make a bargain, I think the Prime Minister was justified in making sure, and could do no other than make sure, that we should, at any rate, receive similar payment from our Allies. That has not been done. We had fancy figures given by the Chancellor of
the Exchequer which approached within £5,000,000 the payments to America, bat there are so many conditions attached and the conditions given have been so extremely lenient, that I am afraid the gap is very much wider.
I must say a word on the Russian question. I have always understood that the Russian Government, in their negotiations with the late Government, in the Genoa negotiations, and at other times, haze never refused to discuss the question of their debts. I discussed the matter myself three years ago in Moscow, and I found there a disposition on the part of the most responsible of the leaders of the present Government in Russia to negotiate, this matter. I reported it to this House when I returned. The late Government made a Treaty with the Russian Government. They were defeated at the General Election. The present Government broke off negotiations. The Russian Government have asked in what way that Treaty is unacceptable to the present Government. As far as I understand, no reply has been made. May I ask the representatives of the Foreign Office on the Front Bench what objection is there to open negotiations through our Chargé d'Affaires in Moscow or in London with the accredited representative of the Russian Government?
What objection is there to negotiating? The present Government, surely, are not averse from international negotiations, judging by recent history. What harm would there be in sending a Note to the Russian Government stating why they object to the Treaty entered into, or, at ant rate, initialled between the late Government and the Russian Government? We could be no worse off, and we might get some equitable arrangement which would bring relief to our Treasury, and afford some means of getting settled debts owing to private citizens, some of whom are suffering very much indeed. We could lose nothing by it, and we might remove many of the present causes of friction. I am afraid political prejudice here does play a part, and it is reprehensible that that should be the case. The Under-Secretary shakes his head. If I may say so, he is a very broad-minded man, but he, unfortunately, is not the Foreign Secretary, not the, Chancellor of the Exchequer, not the Prime Minister. It is reprehensible, at
any rate, that these negotiations have not been reopened. The present Government have been 18 months in power, and might have explored the ground to see whether some equitable arrangement could not have been come to, not for the benefit of the Russians, but for the benefit of our own people to whom money is owing, and for the. benefit of our trade.

Sir FREDRIC WISE: The hon. and gallant Member for Central Hull (Lieut -Commander Kenworthy) stated that he thought the taxpayer in Britain had seen let down. I will endeavour to show him that I do not think the taxpayer has been let down. As far as tariffs, which he mentioned, are concerned, I agree with him. I think some bargain might have been made with regard to tariffs, especially over the Italian debt. The right hon. Member for Colne Valley (Mr. Snowden) gave many flowery figures, and I always enjoy listening to his speeches, but in no instance did he state how this money could be transferred from one country to the other. It is the most important problem of all. Even the Chancellor of the Exchequer never really went into those important details. I am sure the whole House is agreed that a solution of the international debt problem is most necessary at the present time, although it is indeed intricate and full of difficulties. Large payments between countries are really an untried factor. Nobody knows what may be done in the future, but in my estimation it will more or less turn on what happened in the past and the financial machinery of 1914. When that is set going again, you will find that the payments between countries will not be very much larger than they were in the past. The financial machinery of 1914 consisted of arbitrage, exchange, acceptances, the bill on London, and so on. It was that sort of instrument which kept the payment of money through exchange or goods between one country and another right, and on a level gold basis. The Chancellor of the Exchequer did refer to the period after Waterloo, and my hon. Friend the Member for Wimbledon (Sir J. Power) also referred to the war of over 100 years ago. More or less similar things occurred then as are occurring now. Austria owed Britain more than other countries. In the end the actual debt of Austria could not be met, and although Austria owed us round about £28,000,000,
we were very pleased to settle for £2,500,000 by Austria giving the British Government bills on London.
But the main point to consider is how these debts can be paid. I eliminate gold, because there is not sufficient gold in the world, and I come down to two main points—and two points only. The first point is that in overseas trade balance, the exports must be greater than the imports; and the second point is the creditor nation investing money in the debtor nation.

Mr. JOHNSTON: Might they not pay also by service as well as goods?

Sir F. WISE: I think we can eliminate service. Nobody wants Italians to come and work here, and nobody wants Britishers to go and work in the United States of America for the debt service.

Mr. JOHNSTON: You took them to France.

Sir F. WISE: The Britishers did not go to France. We endeavoured to arrange something, but nothing was ultimately arranged. The main thing, however, is that although a country may balance its Budget, it still may have the difficulties and problems of the transfer of money from one country to another. The main thing to consider—and I am sorry the right hon. Member for Colne Valley did not mention it—is the problem of transfer. I was reading a speech by a Mr. Parker Gilbert, the Agent-General for Reparation Payments, only the other day, and he seemed to have some doubt as to this problem of transfer which will come in the future. I will read two lines of his speech. He stated:
It would he idle to attempt to speculate on the possibilities of future transfer.
Of course, he is dealing with the Dawes Report. But when you think that over a long period of 62 years there is a demand to transfer £3,000,000,000 across the Atlantic to the United States of America, it really appears to me laughable, and some definite alteration will have to take place before very long. America holds about one-half the gold of the world. I contend that, as far as our Debt to America, which was referred to by the Chancellor of the Exchequer, in 1925 is
concerned, I believe that payment could not have been kept up if 'we had not been the largest gold producer in the world. When I say "we," I mean the Empire. The Empire produced 70 per cent. of the gold. In 1925, £10,000,000 worth of gold went to America to help to pay that payment, and if you think of our balance of trade, which last year was only £28,000,000, compared with £63,000,000 in 1924, the 28,000,000 is almost at its lowest ebb. That £10,000,000 of gold helped to pay our Debt to America. We have also been helped by the price of rubber, and, probably the Australian loan which we sent to America, because the voluntary embargo was on in this country; these items helped the problem of the Debt payment. But we are very different from other countries. We are dependent on our imports of food and raw materials from abroad. The Fordney Tariff does hit us very hard. I feel that America is bubbling over with fatness from the debts she is claiming from the Allies which fought with her in the War.
I come to the Italian Debt. There is a very interesting speech in to-day's "Times," made by the Chairman (Sir Felix Schuster) of the British-Italian Banking Corporation. It gives the position of Italy very clearly. The right hon. Member for Colne Valley, speaking at Burnley on the 29th January, said:
He was sick and tired of the British Government being magnanimous to all their foreign debtors at the expense of the taxpayers of this country.
The arrangement may sound rather small, but how was that debt made? It was made by sending goods to Italy. Italy owed us £600,000,000. It was £600,000,000 of goods that went across to Italy. it was War goods, but yet it was goods; it was not gold. It was not credit. It was goods, and how are they going to pay us? Is Italy going to pay us in goods? Supposing instead of Italy paying us £4,000,000 a year, we had made it £8,000,000 a year. Would it not have meant more Italian goods coming into this country? In 1925 we imported £19,000,000 worth of Italian goods. I contend that to increase that amount would mean more unemployment in this country. Is that advisable? Is that just to the unemployed? Do the taxpayers of this country understand it? I have a list of the goods which actually came
into this country in 1925. Cheese from Italy amounted to the value of £802,000; silk piece goods wholly of silk (except apparel and embroidery), dyed or not dyed £2,000,000 odd, etc. More of their goods would come in if Britain demanded more, and more men and women would be unemployed. We have already received £2,000,000 from Italy. I contend that is settled by my second point, namely, the creditor country investing in the debtor country, and I take this from the "Westminster Bank Monthly Report" for March, showing the investment of United States money and English money in Italy. This monthly report states:
 The policy of obtaining support from abroad for Italian industries was steadily pursued; large blocks of Italian shares have been placed in London and New York, while at the end of February the announcement was made of an issue in New York of $21,000,000 bonds at 7 per cent., redeemable in 26 years, of the Italian National Credit Instituto for Public Utility Enterprise.
6.0 P.M
Does that not show my second point, that even this £2,000,000 which we had to receive is probably paid by British investment in Italian properties, stocks or shares? I contend—and the Chancellor mentioned it—that the great thing is the capacity to pay. It is in many respects the capacity to pay—but we are a peculiar country What I contend is of more importance—and I have repeated it before in this House—is the capacity to receive. If there is one thing this country and the House wants, it is employment for our men and women. If you look at it from the capacity to receive, I think hoe. Members will agree with me that it is essential that the amount of Italy should not be increased beyond the £4,000,000 a year, and I think the Chancellor of the Exchequer has made a good bargain so far as that is concerned. Where I criticise the Chancellor—and I am sorry he did not mention it in his speech, and I am sorry also the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) did not mention it either—is in regard to the £22,000,000 in gold belonging to Italy deposited here. The Agreement in the White Paper, which gives us the particulars of the settlement of the War Debt of Italy to Great Britain goes into details. I do not think a good bargain has been made in respect of that. Why should we give up any of that £22,000,000; we are reducing the debt to
Italy to a nominal £4,000,000 a year. The £22,000,000 in gold would be very valuable to us. It is here. We have got it. We could have used it. I contend that one way of using it would be to send it across to America to help to pay our debts there.
In regard to Germany, I think the right hon. Gentleman the Member for Colne Valley referred to the Dawes Report. The Dawes Report did not state the amount that Germany had to pay, and did not state the duration of the payment. Does the right hon. Gentleman for Colne Valley really think that, although £50,000,000 has been paid as the first year's reparation, Germany in a few years' time will be able to pay the full amount of the Reparation £125,000,000? How was the first payment made? The first payment was made by the United States and ourselves floating a loan to Germany. Seven-eighths of the first reparation payment was this external loan. I cannot help thinking that anybody Who looks at the figures of Germany must realise that that full payment in two or three years' time cannot be kept up. The old way Britain used to have of collecting reparations through the Reparation Recovery Act was, I think, right. It was a sound way. It collected the actual sterling here instead of having marks in the till of the Agent-General in Berlin. I never considered that was business so far as the payment of reparations was concerned, and so far as turning marks into sterling or dollars was concerned.
France is in a pitiable condition so far as her credit is concerned. One might say that her credit is one-fifth of what it was in 1914. She has no definite arrangement with the United States of America, and really no definite arrangement with ourselves, so far as I can see from the Chancellor of the Exchequer. Would it not be possible for the United States, France and ourselves to meet and consider the actual problem of her Debt solution; and if this problem was considered, could it not be carried further and consideration given to the whole international debts of Europe and the United States of America? Trade with France has been referred to by one or two Members. Well, it is not so good as it was. From January to July, 1925, the exports were greater than the imports. From August, 1925, to February, 1926, the imports were greater than the exports.
That is possibly owing to the inflation of the franc; but it shows that France will have greater difficulties in endeavouring to meet the amount of £12,500,000 which the Chancellor has suggested, because by these figures she will not be able to pay with her exports. This was one of the points I mentioned at the beginning of my speech.
I do hope that the Chancellor of the Exchequer and the right hon. Gentleman the Member for Colne Valley will consider that the whole of the National Debts is a problem of transfer. These problems, I claim, are concentrated in two points. The one is, that the exports must be greater than the imports, and the second point is, that the creditor nations can invest funds in the debtor nations' properties. This is the only real way payments of international debts can be paid. The Chancellor of the Exchequer gave us certain figures, from which, if they are accurate, it would appear he is still about £4,500,000 short of our payments. The more we receive, unless it is of the absolute necessities of life, the more it will lead to unemployment in this country. I sincerely hope the Chancellor of the Exchequer will study this problem of the transfer of money from one country to another, and I firmly believe the Italian debt has been arranged in a just and right manner, and not to the detriment of the British taxpayer.

Mr. PETHICK - LAWRENCE: This Italian debt settlement, which we are considering to-day, is one more nail in the coffin of the great illusion about the War. It is becoming increasingly clear to all intelligent people that war is not only a great disaster to the defeated but nearly an equal disaster to the victors, not only in respect of human life but in regard to the actual wealth of the country. This Italian settlement is one stage further in the deflation of the bluff that has been used by men in high positions during all these years. Just as the Dawes Report pricked a great deal of the bubble with regard to reparations, so this Italian debt settlement pricks the inflated figures in regard to the international and Allied debts.
The Dawes Report brings down the maximum to be obtained from Germany to about 20 per cent. of the figure
originally given. This Italian debt settlement brings down the amount which we are to receive from Italy to something like 10 or 12 per cent. of the whole of the Italian debt. People who do not understand finance, adding up all the payments for the 60 years, would possibly get a different result, but from a financial point of view we are really, by this settlement, writing off from 80 to 90 per cent. of the entire Italian debt. That is surely the mountain being in travail and a little ridiculous mouse being born. But I am not quite sure whether even the ridiculous mouse will survive, and, if I understand the 'Chancellor of the Exchequer aright, he takes a similar view. In plain words, even this is not a final view in regard to the Dawes Report, or in regard to the Italian debt settlement. The Chancellor of the Exchequer, quite rightly, in my opinion, east very grave doubts as to whether, in either of these cases, the two sums contemplated would, in fact, be obtained.
We have heard a great deal in these controversies about the deflation of money. There is another deflation which has gone on, and that has been quite as important, and as essential, and that is the deflation of the extravagant ideas which were put forward from the beginning by those in charge of the affairs of this country, and every country in this matter. Mr. J. Maynard Keynes, in his introducton to his "Revision of the Treaty" makes this very cogent remark:
 It is the method of modern statesmen to talk as much folly as the public demand, and to practise no more of it than is compatible with what they have said.
He goes on to speak of statesmen—or the politicians, as I should prefer to put it—treating the people as children are treated under the Montessori system. That system is for the public—the child—where
he who contradicts this child will soon give place to other tutors. Praise, therefore, the beauty of the flames he wishes to touch, the music of the breaking toy; even urge him forward; yet wait with vigilant care, the wise and kindly saviour of society, for the right moment to snatch him back, just singed and now attentive.
My complaint against Chancellor is in not preventing the statement of extravagant hopes and extravagant figures which the Government of which he was a prominent member allowed the people of
this country to have sonic years ago. I think that in this country, owing, perhaps, to the wise financial reputation we have, we came to our senses a little earlier than they did in other countries. Both in France and in America the politicians still feed the people on extravagant ideas as to the recovery of vast sums of debt and reparations which, to a large extent in this country, we have already deflated, considering this view of reparations and the recovery of international debts to be extravagant and absurd.
Let me take the special question of Italy. In the first place, war debts are not on precisely the same footing as ordinary commercial obligations. The reason is that it is an entirely unreal atmosphere in which they are created. It is unreal fur two reasons. First of all, if a military point is to be held, and one of our Allies holds that point, and we supply ammunition, then that ally is debited with a debt. But, if, in addition to giving ammunition, you send along men—a much greater sacrifice—then there, is no debt which your ally incurs to you. That is one reason for time unreality of these debts.
The other reason is that the debts are incurred in war time when normal conditions of trade are in suspense. During the War, therefore, the sums obtained are on an entirely different footing to a debt incurred in the ordinary transact ions of peace.
Not only are war debts of a different kind from some of the debts incurred under other conditions, but it is not always worth while to recover the whole of the war debt in a similar way that it might be worth while for people to expect the recovery of commercial obligations. It is not worth while for several reasons. One is that if the people of a poor nation have to stint themselves and go to greater poverty in order to pay the war debts, the amount of ill-will that is thereby engendered is much more dangerous and injurious to the creditor countries than the loss of the small amount which they otherwise suffer. They have to pay in armies to insist on the collection of the debt, or to spend over the ill-will which is created, In consequence, I am one of those who hold that it is much wiser to come to a settlement which can be accepted con amore by the debtor nation.
Those are two good grounds for regarding the original views as extravagant. Now I come to one which is still more important, and which is in accord with the view of the hon. Member for Ilford {Sir F. Wise). International debts can only be repaid in goods, or services, which are really a form of goods. Payment in goods by one country to another upsets the delicate balance of trade. In the ordinary course of things there is a balance of trade, and goods pay for goods, but if we introduce, on purely financial lines, an entirely new and enormous figure of debt, and attempt to liquidate that through the ordinary economic channels, we are upsetting the normal balance of trade, and it is quite impossible for the debtor or the creditor country to digest the terrific changes which are produced by attempts to liquidate these financial obligations. More than that, these great debt, settlements upset the exchanges, and any large receipt of goods coming in the form of War debt interest must, therefore, interfere, with the manufactures of the receiving country.
Even that is not all the difficulty; and I wish to go at some length into a point that is often neglected. The effect on a country of trying to pay a large debt is to bring down the real wages inside that country. We have seen that happening in Germany. When it was first realised that Germany had to pay a great, debt to the rest of the world, we saw German real wages—not the nominal wages in marks, but the real wages—go down; and what have we seen again during the last few months, now that the Dawes Report scheme is arriving at a stage when some considerable amount of reparations may be expected? During 1925 the reparation payments were masked entirely by the new loans of America to Germany. Those new loans cannot go on year by year; but the payments are increasing. What, therefore, has been happening? In order to force a favourable trade balance in Germany, the German bank has put up the rate of interest and tried to force down prices in Germany in order to enable exports to take place. By doing so, it has dealt very great injury to the whole situation in Germany. A leading banker in this country told me only yesterday that there are 500 bankruptcies
a week in Germany at the present time, and unemployment is well on its way to the 2,000,000 figure. Indeed, there are over 2,000,000 unemployed at the present time.
What is going to be the result of that In the effort to get into the world market, in the effort to find an additional £100,000,000 of exports, Germany has to cut prices, and the only way Germany can expect to cut prices indefinitely in that way is by cutting down the wages of the German working people. A cut in the wages of the German working people is going to react all round. It is going to be used as an argument in this country for cutting the wages of our workers. It is already being so used in this country. That is always the effect of a large debt settlement. If the Chancellor of the Exchequer had insisted on a very large sum coming from Italy, it would have had the same result in Italy that the payment of reparations has had in Germany, forcing down the wages of the Italian workman, and that in its turn would have been used to cut down wages in this country.
What are the facts with regard to wages in Germany and Italy? The official Labour Report states that wages in Berlin—real wages—are at the present time only two-thirds of the wages in this country, and in Milan they are only one-half the wages in this country. Already that fact is being used to damage the position of working people here. If the position in Germany and in Italy grows worse we are going to force down the standard of life of the working people in those countries even lower than it is, and that is absolutely certain to react on the workers of this country. I am going to quote another passage from Mr. Keynes—from an article he wrote recently in "The Nation." He said that the work of the Transfer Committee must. become more and more obviously, as time goes on, "a struggle to reduce the German workers' standard of life,"
It is because I take the view that, a. big payment from Italy to us in the shape of interest on the war debt is going to injure the standard of life of working people all over the world that I do not join in the attacks on the Chancellor of the Exchequer for this settlement. I
think the actual reduction of the Italian payment to this country was, under the circumstances of the case, a necessary thing, but I would like to make it perfectly clear that in saying that I am speaking for myself and not in any way committing anyone else who sits on these benches. I was glad the Chancellor of the Exchequer expressed himself as willing to make a similarly reasonable settlement with Russia, and if he be really prepared to carry that into effect I do not see any reason why a settlement should not he effected except that the Russians have a considerable claim to set against ours owing to the action which he took when he was a Minister after the War, and lent Denikin a large sum to be used against the present Russian Government. That, of course, entitles the Russian Government to make a set-off against our debt.

Mr. LANSBURY: The Alabama claim?

Mr. PETHICK-LAWRENCE: On the basis, as my hon. Friend says, of the Alabama claim. That in itself will militate against such a settlement of the Russian debt as will be satisfactory to Great Britain.
I entirely endorse what was said by the hon. and gallant Member for Hull (Lieut,-Commander Kenworthy) and supported, I think, by the hon. Member for Ilford, that the Chancellor of the Exchequer might have secured with regard to Italy, and should endeavour to secure in any other settlement, still more advantages from the point of free trade. Though I agree that it is perfectly sound to cut down the amount of interest, our doing so confers a great boon on the debtor country, and for that boon I think we are entitled to claim a quid pro quo; and more favourable terms for our trade might be claimed in granting such a great boon to another country.
In conclusion, I revert to what I pointed out at the beginning. I agree that this settlement is reasonable to-day, but what I object to is the exravagant views that were held and propounded some years ago. The right hon. Gentleman cannot escape from sharing responsibility for those views, because he was a member of the Government that went to the country at the General Election of 1918, when all that nonsense was
talked about making the pips squeak, and when the view was held that in one way or another we were going to be repaid the whole cost of the War.

Mr. CHURCHILL: The hon. Member is doing me an injustice. I used none of that language. On the contrary, at Dundee in the Election of 1918, I stated the figure of £2,000,000,000 as being the maximum of the reparations which could be reasonably expected from Germany, and I have never departed from that figure in the whole period since.

Mr. PETHICK-LAWRENCE: I am very glad to hear what the right hon. Gentleman says; but I did not accuse him personally of being responsible for that statement. I said he, could not escape responsibility as a member of the Government which had taken that view. In this country the principle of joint Cabinet responsibility holds, and though the right hon. Gentleman may not personally have said it—and I quite accept his statement, of course, that he was careful to guard himself—yet he is responsible as a member of that Government for the views that were put forward, and which found embodiment in the Treaty of Versailles. It is in consequence of the views put forward then that we have suffered many of the miseries that have arisen since, and therefore, though I do not attack him about this Italian debt settlement, I cannot hold him guiltless of a great deal of the suffering through which we have passed, and through which Europe is passing at the present time.

Mr. HAMMERSLEY: The Debate this afternoon has roamed over a very wide field, hut it is not my intention to pursue it over so wide an area. In the speeches coming from both sides of the House, I have noticed a good deal of common ground in respect of the position which this country has been forced into, or has arrived at, with regard to inter-Allied debts. The Continental countries—our old Allies—which owe us money, are not taxing themselves to anything like the extent to which the taxpayers of this country are taxed. What, on the contrary, is the situation we find in the United States of America? As the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) said, we assisted that country very materially during the
2½years before they entered into the War. In this country to-day there is a general feeling that the burden we are bearing in respect of inter-Allied debts is intolerable. Not only is that feeling present in this country, but it is present in the United States of America, and, I think, is growing. I read a very interesting statement the other day in the American paper, "The Manufacturers' Record," of Baltimore. They said:
During 1913 and the first half of 1914 industrial depression of the severest kind was sweeping over the United States, and it looked as though a large proportion of our industrial interests were heading for bankruptcy. We were having the largest number of failures recorded in our business history. The War instantly created a tremendous demand from the Allies for everything we could sell. Almost over-night the nation turned from extreme industrial and financial depression to abounding prosperity. Literally, our business interests were being fertilised by the blood of millions, of soldiers who were dying on the battle fields of Europe.
It is interesting to know that point of view is receiving some measure of support in the United States. After all, that is not a point of view which we control, and we have to leave it to America to settle that matter. Our debt to America has been funded, and we shall have to keep to the terms of the settlement. Our debt settlement with France is still very much in the air, but at any rate we can make some remarks about the Italian debt settlement. In regard to this debt settlement, I ask those who think the terms are unfair to this country, what is the practical alternative? If we do not come to a settlement now and decide to wait, what is going to be the effect of that policy? What can we do in the matter? Would any Member of this House think of suggesting that we should go to war in order to collect these debts? What is the practical proposition which hon. Members put forward if we do not agree to these settlements? The only alternative is definitely to present our Treasury demands for payment. That would cause a gradual diminution of the rate of exchange. We should lower the. rate of exchange in all those continental nations as well as incur great hostility, and in that way we should do ourselves a great deal of harm.
The right hon. Gentleman the Member for Coble Valley referred to Italian com-
petition more particularly in reference to textile trades. It is a fact that owing to the low rate of exchange Italy is competing in the neutral markets of the world more and more with us, and, if by our action we were to run the risk of depreciating the rate of Italian exchange by presenting our Treasury demands, that competition would grow. I suggest that the proper procedure is the policy we are now pursuing; that is, endeavouring in the interests of British trade to get these debt settlements fixed up. There may be differences of opinion as to whether we could have got a little bit more or a little bit less, but those things are quite subsidiary to the main question of getting our Inter-Allied Debts settled in order that we may get on with our normal trade. I contend that this debt settlement with Italy is a very fair one. It is not only fair, but it is very generous to Italy, and I contend that we ought to accept it because it will do much to secure that peace in Europe which is so necessary for our industries.

Mr. JOHNSTON: I rather gathered from an interruption made by the Chancellor of the Exchequer a moment or two ago that he was priding himself on his consistency in regard to our reparation demands. The right hon. Gentleman declared in November, 1918, when he stood as a candidate for Dundee, that £2,000,000,000 was the maximum that could be taken from Germany, and he declared that he had never shifted his ground on that point from that time. It is quite a new claim for the Chancellor of the Exchequer 'to claim consistency, but in the speech he made recently he said that the method by which these reparation payments could be taken might be
not to take ships from the Germans, but to make them build for us.
What the consequences of that insanity have been to this country let any shipbuilding constituency representative bear witness. We find that the Chancellor, on the 30th November, 1921, three years later, speaking at a dinner given by the British Overseas Banks Association, said:
He was delighted to see the steady, remorseless march of statesmen of all countries during the last few months towards financial sanity. The nonsensical froth, not only of politicians, tub-thumping at elec-
tions, but of financiers and grave members of the judiciary about extracting £20,000,000,000 from Germany had reduced itself to a much more practical statement of our case. He rejoiced to see that the simple fact that the payment from one country to another could only be made in the form of goods or service had once more become recognised by the most enlightened experts ill different countries.
We find the Chancellor winding up his speech this afternoon with a picture of the reparations from Germany flowing into the United States and leaving poor Great Britain out in the cold. On this question, no one seems to know where the Chancellor stands. We do not know whether he is an anti-reparationist or a reparationist, and probably he does not know himself. There is another group of beneficiaries to which I would like to draw attention, and they have not been mentioned this afternoon. We have had the beneficiaries in France, the United States, and Italy referred to, but nothing has been said about the exceptional treatment being meted out now by the Chancellor of the Exchequer to the beneficiaries at home. Let us see who they are. In 1914 we had the first War Loan issued at the rate of 3½ per cent. Then we had the second War Loan and the rate jumped up to 4½ per cent. interest, and the 3½ percenters were allowed to go on the 4½ per cent. basis. That comes to about £4,000,000 per annum extra in interest. Then we conic to the March, 1916, loan, when I find this advertisement spread broadcast by the Bank of England:
 If you cannot fight, you can help your country by investing all you can in 5 per cent. Exchequer Bards. Unlike the soldier, the investor runs no risk.
Later on we find even the Press which supports the Chancellor to-night saying that if this sort of pandering to the investing public is allowed to continue, victory can be purchased at too high a price. The "Glasgow Herald" said:
It has been said, and not without. truth. that it is easier to find men willing to risk their lives than to find capitalists willing to risk their money—except at a high price.
On this reconversion of each loan as it came along at a higher rate of interest and allowing the previous investors to come on at the higher rate, the "Nation" of June, 1917, states that
a huge proportion of the money loaned to the Government is inflation representing no
real savings on the part of the bankers and financiers who have manufactured it. This means that when the War is over the propertied men in this country will be several thousand millions of pounds the wealthier.
Let us see how some of these loans were issued. I will take the loan of 1918 which was called the Joy Loan. In this case they got £100 scrip for £85 of money, and they got 5 per cent. interest on it. And besides this the £85 counts as £100 for Death Duties. Another newspaper described this Joy Loan as follows:
lf the rate falls to 3½ per cent. it will mean a gift of thousands of millions of pounds in the shape of unearned increment to -he investors out of the taxpayers' pocket, and this is, from the point of view of the English people, the most burdensome and vicious loan in English history.
Then we had the Victory Loan. I find that in regard to this loan the Pearl Insurance Company issued an appeal in the following terms:
For every £100 put into the Funded Loan, the State will pay at least £260.
Then we find the same process going on in regard to Short Term Loans. The Exchequer ranges the rate of interest deliberately, wilfully and wantonly. In October, 1919, the financiers of London withheld money from the Treasury and compelled a rise of 1 per cent. in the interest at a time when the wicked railway men were being indicted as holding the nation by the throat and running away- with £15,000,000 per annum. I will not repeat facts which are well within the knowledge of every hon. Member here, or state how the rate of interest jumped from:3½ per cent. finally to 5⅛ per cent., but I would like to draw attention to what the Chancellor is doing now. Not only are these people taking from us £330,000,000 in interest; not only are they imperiling our trade and commerce in this way, but along comes the Chancellor of the Exchequer and two of his predecessors in office—not the last Chancellor of the Exchequer—and they actually take 2s. in the pound off the Income Tax of those investors.
Not only have these people had their financial clutch on the throat of the nation strengthened, but the right hon. Gentleman in his last Budget came along with the income Tax and gave them a considerable relief, and Super-tax relief in addition. Anything and everything, up to many millions sterling, the present Government and its capitalist predeces-
sore have done to strengthen the grip of the financiers upon the nation's throat. There are many here who will remember what happened during the War. Two grocers, or two barbers, in the same street, were hailed before the tribunal, and the tribunal said to the one, "Go to the Front," and to the other, "Stay behind." The man who went to the Front had his business closed, he was ruined, and it may be that, in addition, he has come back with a wooden leg and is running about to the Ministry of Pensions endeavouring to hold on to a pension of 10s. or 15s. a week, if he has been lucky enough to get it. On the other hand, the financial class was bribed with increasing bribes to hand over their alleged credit to the nation in its hour of distress.
The late Mr. Bonar Law, with all these facts within his own knowledge, warned the nation of the difficulties we should have to surmount when we were compelled to pay back those pounds sterling; borrowed at about 11s. or 14s., at the rate of 20s. to the £. He said he was appalled at the prospect. Despite that, the present Chancellor of the Exchequer comes along and takes from industry and commerce funds to relieve these super-fortunate tributories of the National Exchequer, to reduce their Income Tax and Super-tax, instead of doing what some of the financial people in the City of London asked his predecessors to do, namely, to put a special tax upon these sheltered recipients of the nation's bounty. The present Chancellor of the Exchequer deals more generously with the bondholders in this country than he has dealt with the bondholders in Italy, the United States and France.
I agree with previous speakers that there are only three possible ways in which you can get an indemnity paid. One is gold, another is services, and the third is goods. Gold, for all practical purposes, can be wiped out; there is not the gold in the world to pay it. In the second place, you cannot take services. Try and bring over a flood of Germans to this country to work on the roads, at mining coal, or building ships, and you will have a bloody revolution. You dare not try it. Only the third way remains; and if you take your reparations in goods for which you send out no goods in exchange, you are going to smash your own trade and industry.
You have done that already. You did it in ships, in dyes, and in everything. I, for one, make no complaint whatever about the Chancellor of the Exchequer's treatment of allied debt payments from abroad, but I do attack him, our future generations will attack him, and the present generation, later on, will attack him for this, that he is deliberately pandering to the investing class in this country, to the bondholders who lent us their credit when pounds were worth 11s. or 12s.—someone says 8s., but I will take it at 11s. or 12s. Suppose that I lent £1 to the nation when it was worth 12s., that my interest was fixed by Statute, was fixed by guarantee, and that that interest entitled me to buy, say, a bag of potatoes. Now, by means of terrible sacrifices, by gold standards and otherwise, prices have collapsed in this country, and at the present time, with my interest on War Loan, I can buy, not only one bag of potatoes, but, perhaps, two bags of potatoes--I can buy more goods and more commodities. All taxation is finally paid in goods and commodities, and the lowering of prices has simply meant doubling the purchasing power of the investors in British War Bonds.
Despite that, the present Chancellor of the Exchequer and two of his predecessors deliberately come along and take from the taxation of this country sums of money amounting to 2s. in the £ on the Income Tax, to reduce the Income Tax and Supertax of these War Bond holders. I trust that Members in every section of the House will keep rubbing the Chancellor's nose in that fact. [An HON, MEMBER: "He will not care!"] He must care. The people of this country cannot go on bearing this burden while one section is thriving and fattening on the miseries of everyone else. It is the trade and industry of the country that keeps the country going, and if the rentier class, the investing class, are going to be allowed to double their income at the expense of the producing classes in this country, there will come a breaking point. It will be well for the Chancellor of the Exchequer to take thought in time, and, in his forthcoming Budget, to take steps, by way of a special tax upon War Loan Interest, to see that the grievances of which I have complained are, to some extent at any rate, remedied.

Mr. ROY WILSON: I would like, with the permission of the House, to try to deal with some of the remarks made by the hon. Member for Dundee (Mr. Johnston). His complaint this afternoon is not, as I understand it, against the Chancellor of the Exchequer or the debt settlement with Italy; it is that too high a rate of interest was in the first instance offered to investors who lent their money during the War, and he finished his speech by urging the Chancellor of the Exchequer, in his next Budget, to bring in some tax which would materially reduce the interest burden in respect of War debt. It does seem to me that we ought to get the proper perspective in matters of this sort. I do not accuse the hon. Member for Dundee of wilfully misrepresenting the facts in this House, but I want to draw the attention of the House to one or two points which I think hear upon his remarks, and which must be considered, not only by those in this House, but by people outside who have to deal with these matters.
It must not be forgotten that during the War one of the greatest anxieties which this country had to face was the provision of sufficient funds to carry on the War, and, if high rates of interest were offered in order to attract money with which to carry on the War, not only for ourselves but for our Allies, those high rates of interest were offered to attract, not only the limited amount of money available for investment in this country, but hundreds of millions of pounds which were subscribed from abroad. The question was, after all, a question of supply and demand. If we were to continue to do what we were doing during the War, namely, to finance, not only our own very heavy expenditure, but that of our Allies as well, it was incumbent upon the Government during the War to find the money on the best terms obtainable from all sources in every part of the globe. That is why, in my judgment, at any rate, and I am sure it is the opinion of financial authorities in the City of London, it was absolutely necessary that the Government should offer rates of interest like 5 per cent. on War Loan, such as they offered during the War. The hon. Member for Dundee has omitted to mention one very important fact, and that is that it was not the capitalist class who
received the great advantage during the War in rate of interest on War Loan. Surely, he has forgotten that the class in this country who received the most remunerative rate of interest during the War were the small investors of this country, the workers of this country, who were asked to subscribe, and did subscribe, to War Savings Certificates, upon which they received, not interest at 5 per cent., which was subject to very heavy Income Tax and Super-tax, but interest at the. rate of 5¼ or 5½ per cent., free of Income Tax.

Mr. CONNOLLY: What was the proportion of those people?

Mr. WILSON: The proportion was a. very considerable one. At least £20,000,000 was subscribed in War Saving: Certificates during that time. That is a matter which should be remembered when these points are being considered I would ask the hon. Member for Dundee and those who think with him to remember that it is perfectly futile to suggest to the Chancellor of the Exchequer that he should bring in a special tax on War Loan, and for this reason, that a very considerable proportion of the amount of 5 per cent. War Loan now outstanding—I believe it is nearer £300,000,000 than £200,000,000—is held by investors abroad, and, surely, the House will realise how impossible it would be for this Government, if they have any regard for the credit of this country, to impose taxation which would in effect be a repudiation by His Majesty's Government of their obligations to holders of British War Loan who are resident abroad.

Mr. JOHNSTON: Why reduce their taxis? Would the hon. Gentleman answer this question for me? Does he justify the reduction in the Income Tax on I hat money?

Mr. WILSON: Most certainly; I think it can be justified, and very properly justified. It has been the reduction in Income Tax in this country, and particularly the reduction made by the Chancellor of the Exchequer last year, which has given the greatest advantage to the poor people of this country, to people with small incomes. I want to say a word about the Inter-Allied Debts. I am not going to suggest for one moment that the settlement of the Italian Debt made by
the Chancellor of the Exchequer was anything but a good settlement, but I would ask the House to remember this: It has been stated in this House this afternoon by various speakers that payments can only be made by goods and by services. That is a profound truth; we must eliminate any question of the transfer of gold in any considerable quantity. I would ask the House to remember that it is a fact that Germany to-day is finding it increasingly difficult to meet the reparation payments which are due under the Dawes Report. I am not making that statement with any idea of suggesting that Germany is desirous of repudiating her engagements, but, undoubtedly, in my humble judgment, the time is coming when all the nations of the world will have to get together and reconsider the whole question of War indebtedness.
I do not wish to be misunderstood. I do not suggest that this country should in any way attempt to get America to let us off the bargain we made some years ago. I am one of those who believe that we ought to pay our debts, and that we. can pay our debts; but I do say that the time is coming—and it may be much nearer than many of us expect—when we shall all have to get together and reconsider the whole question of these inter-Allied Debts. So far as our obligations to America are concerned, I hope we shall never repudiate, or attempt to repudiate, the settlement that has been made, but it will have to be borne in mind, not only in Italy, not only in France, but in America, that if these debt settlements are to continue, and if payments are to continue 'Index them, the fundamental fact must he recognised that it is up to the nations concerned to see that those payments ale allowed to be made in the only possible way in which they can be made.
7.0 P.M
By that I mean that, so far as our payments are concerned, if they are to continue, there will in due time have to be some arrangement made under which, by the lowering of tariff walls, our goods and our services can go out to America to provide for the payments which we are obliged to make. Many people in this country, who think themselves qualified to speak on this question of war debts, lose sight of the fundamental principles underlying them and are too much in-
clined to look at the question of how much a certain nation has promised to pay without examining the capacity of that nation to pay in the only way in which any nation can meet its overseas obligations. I hope these matters will be considered, and I am perfectly certain that His Majesty's Government have all these points in mind. I only rose to say that I entirely support the settlement with Italy made by the Chancellor of the Exchequer.

Mr. GILLETT: I think the last speaker has tried to argue too much and has stressed to too great an extent the amount of money invested by the small investers in War Loan in the War period. Surely no one in this House, who had any knowledge of finance during the War, can dispute the first great principle that those who had to finance the War made exceedingly well out of their financial transactions. In the second place, I would like to remind the hon. Member that that War debt was created to a, very large extent by an enormous creation of credit, the advantage of which fell to those who were in the fortunate position of being able to assist in the creation of that credit. Therefore, it seems to me that if we are referring to that side of the question, we should recognise that those who have made large fortunes out of the War can at any rate pay a large contribution at the present time to the cost of taxation due to the burden of that debt.
I should like to suggest to my hon. Friend, who opened this question, that the mistake he makes is when he thinks that the same set of people have benefited, for it does not follow that the present holder of War Loan necessarily made a profit. He suggests that they should be collected for special taxation. In the first place, no Government that I can imagine could adopt such a course, because of the prejudice it would inflict upon their own credit. I very much doubt whether he has fully recognised that at the present time the Government have something like £500,000,000 in Treasury Bills being tendered for week by week. Any question of the Government's policy on credit would inevitably lead to a very serious financial position, for any Government that tried to do what he suggested might be asked within three months to repay a large part of
that £500,000,000. Where I do entirely support him is when he says that we are not imposing sufficient burdens upon the classes who did benefit by the War, whether they made their fortunes out of finance, or commerce, or in any other way. If that be his line, I entirely agree with him. It is on that principle that I believe the present Government are doing absolutely the reverse. They are lifting the burden from the shoulders of those who benefited from the War. It is for that reason that I sit on these benches as a protest against the Government's policy in finance, a policy which, while relieving Income Tax payers and Supertax payers of their burdens, is lifting the burden from those who made fortunes out of the War and leaving it to be borne, to a far greater extent than it should be, by the working-classes and middle-classes of this country.
The main subject this afternoon has concerned the relationships between the different countries in regard to debts. I would like to say one thing in reply to the hon. Member for Ilford (Sir F. Wise). He suggested that any repayment of debt must lead to unemployment. He almost argued that it was evil for a, country to receive any debt. I should like to suggest to the hon. Member that you can press that theory too far. Theoretically, I do not believe, if you can argue the thing out, that you can prove that a country is going to suffer by taking goods handed over to her. We make a mistake if we press the argument to that extent. I do not think you can prove that at the present time the United States have suffered from the £30,000,000 or £60,000,000 that so far we have paid to them. But if he refers to the transfer of goods to a certain country, for instance the coal that has been sent under the Dawes Report, I entirely agree that our trade is very seriously dislocated by the transfer of the goods, and you can actually say that unemployment has been created by those goods coming in, You cannot prove that, if we receive, say, £2,000,000 of Italian goods, and if it is possible to transfer those goods straight away to the United States in part payment of our debt, we are not better off to the extent that our Government has not to take £2,000,000 worth of goods at present in this country and send them to New York. Therefore, theoretically it is a mistake if the hon. Member for Ilford wishes us
to believe that a country is going to be worse off because it is receiving goods in the form of debt payment; but, if he refers to the dislocation of trade, which is the point stressed by some of my hon. Friends, then entirely agree with them.
Passing from the question of how the roods are going to be transferred to this country to the point raised by my hon. Friend who spoke from this bench, it will be remembered that he referred to the hardship inflicted upon the country that is paying the goods, especially in the case of Germany. That seems to me to be a serious point, and it is the point that impresses me even more in some ways than the point raised by the hon. Member for Ilford, because it seems to me that you are placing a burden upon Italy and Germany and incidentally upon France, which is having the exact effect on the workers in those countries that my hon. Friend complained of. It is lowering their standard of life and to tint extent it is inevitable, though not perhaps at first, that we in this country and our workers, will suffer from the fat that we are pressing down the standard of living of the people in the countries of Europe. Therefore, for this reason, quite apart from any other, I look much more favourably upon any settlement of the debt problem that is going to make it, after due considerations of justice for the people of this country, as easy as possible for other countries to come to a settlement of these problems.
I agree entirely with the Chancellor of the Exchequer, and I wish, as he does, that it had been possible to have had no repayment at all either to this country or from this country to the United States. I do not think that the United States have enhanced their reputation by the insistence they have made upon payment from this country and from France and from Italy. I entirely agree that they are perfectly justified, but at the same time they would have made a great contribution to the settlement of the world if they had stepped forward and said that they were willing to forego their debts provided all the other nations were also willing to forego theirs.
There is one point in connection with this settlement which I especially wish to stress. We have looked with less satisfaction upon the settlement with
Italy, because there is no doubt that the Italian Government does not meet with the commendation or approval of many of us who sit upon these benches. For that very reason, I want to take that entirely out of the question, because I absolutely agree with the Chancellor el the Exchequer that this is a matter which we ought not to take into consideration when we are considering a debt settlement. I should like him to impress that sentiment upon the hon. Members who sit behind him, because it is the very thing, to my mind, which the Government and the hon. Members opposite are doing in regard to Russia. In regarding the Italian settlement, I want to eliminate this question from our minds, and I hope that hon. Members opposite will face up to the Russian position in the same way as the Chancellor of the Exchequer recommended us to face up to the Italian settlement this afternoon, because until we settle with Russia eve are not going to get any further towards a real settlement in Europe. Sooner or later we have to come up to the Russian position. We have to face Russia in the Near East; we have to come in touch with Russia in regard. to problems in China and in that part of the world. We have in this House constant complaints being made because no assistance is given to opening up trade with Russia.. Even supporters of the Prime Minister have in the last few weeks urged that something should be done to try and improve the relationship between this country and Russia for trade purposes. When we accept this settlement which has been made with Italy, I would urge that they should take a. step forward and see if they cannot do the same thing with Russia, and bring about a settlement between this country and Russia.
The terms of this settlement are generous to Italy. You have only to read the report made by one of the Bank Chairmen who has been recently visiting Italy. Making all allowance for the fact that when you go to a country you often see only the things you want to see, that report, speaking of the conditions there, does confirm Italy's financial position. When we look at France, we see that it is in many ways in a far better position than we are. I believe there is hardly any unemployment there. It seems to me a strange thing that we
have to be making these large concessions to them in regard to their debts. Of course, we know perfectly well that, in the case of France, the position is to a certain extent false owing to their monetary policy of inflation. In spite of these things, I believe it is a wise thing to try to come to a definite settlement on the best terms possible, and, in accepting the Italian debt settlement, I very much hope it will be followed by a settlement with the Russian Government.

PRISONERS (RELEASE).

Mr. LANSBURY: I should like to join in the appeal to the Chancellor of the Exchequer, through the Financial Secretary, on the question of Russia. As I understand it, the answer to us every time is that the Russian Government conducts its business on a different basis from others, and has repudiated private property and private debts and so on. If you are going to consult them about any debts at all—and everyone says if it were not for their system of government and their system of running business, you would be willing to do that—I should like to suggest that, unless you are banking on the destruction of the Soviet Government, the longer we put it off the worse the position becomes here, and the more aggravated becomes the position of the men who want at this moment to negotiate, and who a little later on may be strong enough to refuse even to negotiate a settlement. It is no use repudiating our interference in Russia. It is no use saying it has no analogy with the Alabama claim case. If anything it is a worse case than the fitting out of privateers. It was stated in the House that up to £100,000,000 worth of ammunition and guns was sent. to Russia to back the armies that were attempting to overthrow the present régime. I only wanted to say that to emphasise the importance that we on this side attach to a settlement with Russia.
I have risen to call attention once more to people who are in prison for political offences, or for offences committed in the pursuit of political objects. I should like to ask the Home Secretary to give us all the information he can in reference to Irish prisoners, both in this country and in Northern Ireland, because I understand from the spokesmen for
Northern Ireland that they have left the question of who shall be released almost entirely in the hands of the home Government. If that be so, I would beg the right hon. Gentleman to tell us what reason there is, if any, for keeping any of these men. He may argue that some of them committed more serious offences than others. In this House, from 1910, I think, to 1914, there was an Irish Member, Mr. O'Brien, who had actually been sentenced to death for offences committed while conducting a political agitation. There was also in this House a few years earlier Mr. Michael Davilt, who served a long term of penal servitude for alleged serious offences. There was no Member more highly respected and honoured than he was.
These Irish prisoners are men actuated by exactly the same high motives as I am willing, whether others are willing or not, to ascribe to the right hon. Gentleman himself and the right hon. Gentleman the Financial Secretary to the Treasury (Mr. R. McNeill), who not so long ago actually organised an army which, in circumstances that might have arisen, could have been used against the authority of this House. You may say these men committed these crimes. The only difference between them and the right hon. Gentlemen opposite is that the circumstances arose which in their judgment impelled them to commit the crime, whereas the War, very fortunately, saved the right lion. Gentlemen opposite from engaging in an armed rebellion. I do not think the right hon. Gentleman can get out of that dilemma in which he is placed, and I want to ask him to take that into account in considering the case of these Irish prisoners, because Ireland. I am told, is now more peaceful than it has been for a very long period, and I am told by friends on both sides that this question of the prisoners, if it could be settled, would have a very satisfying effect indeed, and it is in that spirit, that I put it before the right hon. Gentleman.
With regard to the other prisoners—many hon Members think that if I had my deserts I should be with them—unquestionably all people engaged in a political agitation that they really believe in do, and must if they are really sincere, say seditious things and act seditious things. On the last occasion on which I
enjoyed the hospitality of His Majesty in prison, an officer came to me as he was going to lock the door, and seeing that I looked very dejected and pretty miserable, said, "Well, you know, you must cheer up, Mr. Lansbury. Nothing has ever been done in this, country until someone went to prison." I said, "I wish to the Lord it was you instead of me." In all our history the rebels of to-day get over there to-morrow. There are two of them there now. It has been proved all down our history. At this moment a very considerable agitation is going on as to the proper method of getting redress for grievances which everyone admits are very dire and very grievous to be borne. In the last part of this discussion we have been reminded how, in the judgment of some of us, rich people have got away very comfortably with big sums of public money, while masses of men who gave their bodies in the War are walking about in a starving condition. There is a great argument amongst the working-classes as to whether we are going to get proper redress of those grievances through this House, and through Parliamentary machinery, or whether we shall have to pass through the sort of hell that Russia and other countries have passed through. It is unnecessary for me to state what. my own view is about that, because it is perfectly well known, and it is jeered at by the other side just as much as if I stood to advocate Communist methods.
In my view, every man ought to have an absolute right to say what he likes, and the Government ought never to interfere until it comes to action—to doing things. Then I think I, and anyone else, ought to take the responsibility for whatever we actually do. With regard to the Communists, as far as I know, there was nothing definitely charged against them except that they circulated seditious papers and pamphlets and made seditious speeches and so on. If any of them could have been charged with doing anything, their sentences would have been mush heavier than they are serving. They are in prison because of what they said, as many right hon. Gentlemen in 1913–14 would have been in prison for much greater cause for what they said. No one can deny that. I am not standing here to complain about their treatment as prisoners. Given prison treatment, and given a prison, there are conditions and
regulations, and I think they have been done justly by. But I want to urge on the right hon. Gentleman that we ought to put all such men in a separate class and create a class for political offenders, unless you are going to put them all in first-class. I am not joking at all, but I quite seriously suggest that the right hon. Gentleman should think of the time when Socialist legislation is being pushed through, and you may have an agitation on the other side, and the Noble Lord the Member for Newark (the Marquess of Titchfield) might be very glad to be a first-class political offender rather than the other class. It is time this thing was settled. During the suffrage agitation you know what had to be done. You had to get a new sort of arrangement by which baskets of food were sent it., and great difficulty was experienced by prison authorities in administering the arrangements of the preent Chancellor of the Exchequer and Mr. McKenna. for dealing with prisoners not guilty of moral turpitude.
There were 12 of these men charged, and there are 12 in prison now. Seven will be released on 10th April if all goes well. The whole 12 committed the same offence. The reason the remaining five are in is because they have been there ho ore. That is to say, they have done similar things. They are going to be kept longer, because it is said they are a kind or hardened offenders. I put it to the House, what would you think of them if they were not hardened offenders? You could not change the religious belief of the right. hon. Gentleman by sending him to prison. [An HON. MEMBER: "Oh, yes."] I am sure you could not. If a Roman Catholic or a high Anglican authority came to this country and said, "You have all got. to worship in one particular way, and if you do not you will go to prison," the right hon. Gentleman would go to prison, and, if they let him out at the end of 12 months, he would repeat the offence and go again. He would object, as I would object, to the punishment being cumulative, because he had obeyed the dictates of his conscience and continued to advocate the thing for which he had been punished.
I never believe in raking up against a man something for which he has paid the penalty, in order to increase the punishment, especially in regard to these
men, who ought not to be suffering now because they have suffered before. They have paid the penalty for what they did on a previous occasion and they ought not now to have their imprisonment lengthened because they have been imprisoned before. I do not believe there is a man in this House who would respect any one of them who would give a pledge that he would never engage in this kind of propaganda again. I would have no respect for any of them if they gave any such pledge. Either they believe in the cause or they do not believe in it. If they do believe in it, they have a right to try to convert the country to their point of view. Their point of view is quite definite, that the possessing classes will not give way when their interests are affected. I hope the right hon. Gentleman will not mind my saying that the whole of the Carson agitation gave point to that contention, because it was the big possessing classes who stood behind the Ulster revolutionary movement. [HON. MEMBERS "No!"] It was in this country, whatever it was in Ireland. Many working people believe that no matter what we may pass in this House, if it is fundamental, if it deals with property, or takes away property without giving compensation, there will be a revolution on the other side. These men preach that.
With regard to the propaganda carried on by these men respecting the Army, I will not argue whether they did right or wrong, but the fact remains that soldiers now are voters. Military men sit in this House. I enjoy hearing them speak on behalf of their regiment; "The regiment I command," one hon. and gallant Member said the other day. We never hear a private soldier stand up here and say, "The regiment of which I am a Member," because private soldiers are not allowed to come here. Private soldiers are, however, allowed to vote, and we have a perfect right to go to him and put it to them that we want to get rid of Armies, Navies and Air Forces, and to get them to vote for candidates who believe in that. policy. We have no right to say that there shall be a limit to the propaganda to be put to these men. In these circumstances, I appeal to the Home Secretary to exercise his very great powers in recommending the King
to grant to these men a reprieve or a remission of the remainder of their sentences.
I should like to make an appeal on behalf of the Ammanford miners who are charged with rioting, wounding and sedition. Of the men whose names have been supplied to me, Rainford, Doherty, Wilson and Llewellyn, only one is charged with wounding. The others are charged with rioting or sedition. What the sedition was I do not know. I have no doubt that some rioting did take place. I wish the right hon. Gentleman could have heard' a speech, which was only very partially reported in the Press, by a miner who bore the stamp of sincerity, at the Albert Hall. I had never met him before that occasion. If the right hon. Gentleman could have heard the story which that man told as to the causes of the trouble I believe he would take a different view from the one he now holds. These men were suffering under very extreme provocation. They were dealt with in a harsh and brutal manner, and each one has more than paid the penalty. I do not believe that any one of them Had been in prison for a similar offence. I do not believe that any one of them had ever been in trouble in the ordinary way of offences against the law, such as burglary, theft or offences of that kind.
The House and the right hon. Gentleman ought to take the circumstances and the conditions in that district into account, and these men having served this imprisonment ought to be released. They are all workmen. It cannot be said that they are paid agitators. They work at the coal face or above the pit. I have been near the district where they live and have met their friends, and I am told that they are decent men, and not so bloodcurdling as I am supposed to be. They are men who have never committed any sort of crime for which men go to prison. I do beg the right hon. Gentleman to give these men, and the others I have mentioned, favourable consideration. I do not complain of the treatment of any of these men in prison, so far as I know about it. I believe that they have had the benefit of whatever rules and regulations there are, but the best place that a prison can be made it is still a prison. Whatever amelioration you get while you
are in prison, it is still a prison. It means the locking of the door at night and being ordered about.
I am one of those who think that being a martyr and martyrdom is nothing to be proud of, or any of that sort of nonsense. I hope that I shall have pluck enough to take whatever comes my way for anything I do, and now that I am free to stand at this box and speak for these men, I want to say that to be in prison with the knowledge that you have cone nothing of which you are ashamed, that you have only been fighting for something which you believe to be for the benefit of your fellowmen and your fellowwomen, is the hardest and cruellest thing that one can suffer. I can think of nothing more grievous than to keep these men, some of them quite young, in prison during the months of spring end summer. The last six weeks that I spent in Brixton Prison was the most glorious autumn that this country ever gent through. The tragedy was not for me, an did man, but for the young men and young women, who had done nothing at all but stand up for something they believed in. The tragedy was in taking this glorious time out of their lives.
I appeal to the Home Secretary that he will consider these men, who are guilty of no crime in the ordinary sense. When they were offered their freedom, at least seven of them refused to take their freedom, but preferred to stand up for the thing they believed in. The right hon. Gentleman and the people of this country cannot forget the tradition that lies behind us. We must not forget that our creeds to-day could not find expression in this country had it not been for the fact that men went to the gallows, the stake, and to prison in defence of the freedom of conscience and the freedom of speech. When I was in prison a priest said to me, when I went on hunger strike, "You are violating the temple of the Holy Ghost," I replied that he would not have been privileged to tell me that ad it not been for the men who lit the light in England which has never gone cut, namely, Latimer and Ridley. These young Communists, these trade unionists, these Irish Nationalists, are fighting for a cause which, whether hon. Members in this House believe in it or not, will one cay win in this country, and they will be honoured and respected because of what
they have done. If the right hon. Gentleman can say that he will ask the King to give these men a free pardon, he will be remembered as the man who, before it was popular to do so, recognised the right of men and women to stand up and speak the truth that is in them.

Lieut.-Colonel WATTS-MORGAN: I have but little to add to the very well-reasoned and impassioned appeal made to the Home Secretary on behalf of the men in whom I am particularly interested. I come from the district where the Amman-ford miners live, and I have known one of the prisoners, the young man Rainford, for a large number of years. He has borne an exceptionally good character, and there is grave doubt as to whether he was guilty. He is the only one charged with wounding. I appeal to the Home Secretary to show mercy in the case of these men if he possibly can. There is a very strong desire in the district that the matter should be reconsidered. The men have paid the penalty, and I should he very grateful if something could be done on their behalf, especially on behalf of Rainford. I have interviewed the right hon. Gentleman once or twice, but with no success so far. I do hope that he will find a way of meeting the general desire in the locality that there should be some revision of the sentences, especially in the case of Rainford.

Mr. MACKINDER: I would like to add my appeal to the right hon. Gentleman that these men should be released. I do not know any of the men who are in prison, nor do I admire some of the things for which they stand; but if there is one thing I do admire and have always admired ever since I came to the age of reason, it is the right, which I always understood I had in this country, to say the things in which I believe. I do not admire some of the principles advocated by these men, nor do I admire some of the principles that hon. Members opposite believe in. When we gain power, which we shall do some day, I would not like the Home Secretary to be put into prison for expressing opinions different from the opinions which I hold now and which I should hold then. It has always been a matter of history, and history will always repeat itself in this respect, that the more a thing is repressed the more vent and the more public favour it gets.
I believe sincerely that the right hon. Gentleman has made more adherents to the cause which he is trying to suppress than any one of the men who is now imprisoned. I honestly believe that. The same thing has been tried in other cases.
I had the pleasure of visiting Oxford University a few weeks ago, and I found that two undergraduates who had expressed certain opinions in which they believed were told by the Vice-Chancellor that they must do that which the Home Secretary has asked these Communist prisoners to do. The undergraduates were told that if they wanted to remain there they must dissociate themselves from the party which they conscientiously believed was right. The result has been that the repressive methods have gained many adherents to the cause and that instead of losing two it must have gained many.
I believe that we ought to let people express their opinions. I say frankly, as a trade unionist, that were I in a dispute where I thought soldiers were to be employed on one side or the other, I would do all I could, by speech or letter or writing, to try to induce the troops not to shoot in any trade union or political dispute. I believe troops are employed for the purpose, not of intervening in such disputes but of defending the country. I would have no hesitation whatever in asking the troops to do exactly what these men have been sent to prison for. Free speech is one of the most glorious things that the British tradition has got. There are hon. and right hon. Members of this House who have said much worse things. I would not have said that but for the expression of derision which I see on the face of one hon. Member opposite. I add my sincere expression to the hope that the Home Secretary will let these men loose. It will be a big thing, and will be very worthy of the high office he holds.

Colonel WEDGWOOD: I understand that seven of these men will come out on 11th April, and I think the other five should come out at the same time. In saying this, I do not want to appeal for mercy in any sort of way. I want the House to understand that it would be a blow to the English tradition if we continued to keep in prison men who are
obviously unjustly treated by being in prison alone. Everybody knows that my hon. Friend the Member for Bow and Bromley (Mr. Lansbury) has repeated, publicly and with emphasis, the very words which were incriminating so far as the Communists were concerned. There were things which prompted the right hon. Gentleman who is responsible for the whole of the internal affairs of this country, acting on exactly the same principles and on an extreme conviction of the rightness of his policy, to make a speech in which he said, "Shoot and be damned!" There are cases after cases in this country where people have made in public seditious statements urging others to do what was obviously wrong. The case of these Communists is the first, instance where men, for advising people to do what was wrong without it being proved against them that any overt results happened from their preaching, have been sent to gaol. I have before me a speech made by the Bishop of Salford at Manchester the other day. It appears there has been a birth control clinic opened in Salford, of which the Bishop does not approve, and he made a speech to this effect:
The strange thing is that the fathers and mothers do riot rise up in arms against those who have dared to defile the minds of the people and hound them out of the district. One would expect a hue and cry.
Then he goes on:
When the time comes, and I hope it is not far off, the people of Greengate, having discovered the real nature and effects of the instruction imparted, will chase them from their streets.
There you have an instigation to violence absolutely on a par with what the Communists have been sent to gaol for. There are endless cases that one could quote of even hon. Members of this House making speeches which, if they had resulted in some more or less brutalminded person acting on them, would have involved them, quite rightly, in criminal prosecution. The whole point is that for speech alone people should not be sent to prison.
This is the only country in the world where, hitherto, it has been possible to say that for speech alone you could not be sent to prison. The danger seems to be now that we are gradually working round to the conclusion that it is not where justice demands that you should be
rent to prison but where the opinion of the majority thinks you ought to be imprisoned. There has never been a time in history when there has not been a majority of the people in this House in favour of putting into prison some one who is not there. At the present moment, if the House voted on the matter, many would be in favour of Mr. A. J. Cook being in prison. They would say this man is a danger to the community and ought to be in prison. Yet there is not one man, although he might vote that way, who will not say that it is not according to the tradition of England to send a man to gaol because of his unpopularity; he would have to be convicted of some definite crime. It is s question of proof of crime, not of the unpopularity of a man.
There has never been a time in this country when a political party has been so unpopular as the Communists have been. They have been a perfect nuisance to the Labour party, and there is no doubt that they are a perfect nuisance to society. But that is no reason for sending them to prison. That is certainly not a good enough reason for changing the whole traditions of this country, and sending people to prison for the expression of opinions. The Home Secretary is, and, I think, has always been, a very fair and decent upholder of the old traditions of England, and he and I in many cases take the same view. He knows, as well as I do, that constant pressure is put upon people in his position to do the popular thing although it is unjust. It was just that spirit that created the St. Bartholomew massacre in France in the year 1572. There you had a King who became suddenly convinced that he had better be popular, and the Huguenots were massacred.
I appeal to the right hon. Gentleman to be firm, and not to give way to that sort of pressure; to realise that these men have got into prison, not in the interests of themselves, but, as they think, in the interests of England, and that they should come out of prison as soon as possible. I remember when a liberal Government in previous years put into prison a man named Crossley, who had done a precisely similar act; it think he circulated to the troops at Aldershot a leaflet urging them not to shoot. Afterwards Tom Mann a rd a good many other printers got into
prison. The Home Secretary of that day, after they had been in prison for about three months, released them. The feeling was that it was undesirable to imprison people merely for expressing opinions. The idea was—and it applies equally now—that if you put people into prison for expressing opinions, you will have to keep them there perpetually. It is quite certain that when they come out they will again render themselves liable to arrest. You cannot put them in again—or where is it to end? Not only are you to be perpetually responsible for keeping people in prison indefinitely because they have the strength of character to stick to their principles, but you have the danger of increasingly widening the net. You have the Member for Bow and Brornley—you know as well as I do that he ought to have been in gaol a long time ago. You know that the risk will be indefinitely extended if you maintain this idea of putting people into prison for saying things that are deemed to be seditious. Do not let us get into this interminable struggle against freedom of opinion in this year 1926; and do not let us indefinitely widen the field of a struggle which can only injure England and that traditional love of freedom of speech which has made this country great.

The SECRETARY of STATE for the HOME DEPARTMENT (Sir William Joynson-Hicks): I think the House would now wish me to answer in regard to the eases which have been raised to-night. The first is the case of the Irish prisoners. The hon. Member for Bow and Bromley (Mr. Lansdury) raised it in debate some few nights ago and he offered then to send me. a list of the cases he desired me to inquire into. I only got that list yesterday, so it has not been possible for me to communicate with Ireland, and I am not in a position to answer the hon. Member. But. I have asked for full details of the cases, and when they are supplied to me I will communicate with the hon. Member. I have also been asked to consider two other cases in which I am directly responsible. I do not make any complaint about the way in which Members have spoken regarding my attitude, but I do want the House to realise that in these matters you are asking me to do something in regard to which I am personally responsible, and which is not a
Government matter. It is a long tradition that the Home Secretary is individually and personally responsible for the advice he has to give to his Sovereign, and it is really a question of this kind that is raised. I do not object to it being raised. It is part of the many unpleasant duties I have to perform to deal with questions of this kind.
8.0 P.M
Two cases have been brought before me, that of the Communists and that of the Ammanford miners. I want to make it quite clear that these men are not in prison for any expression of opinion. That was made clear, I think, by my right hon. and learned Friend the Attorney-General in the Debate we had last year. He quoted a judgment of Lord Erskine—a very great Judge whose opinion is still good law—that no man can be imprisoned for holding any opinion, nor for propagating that opinion through constitutional methods. The hon. Member for Bow and Bromley made a remark about the proper method of redressing grievances and hoped that the grievances under which a large proportion of the community are suffering would be removed by the House of Commons and that the people would not require to do what the people of Russia had done. There is all the difference in the world between the people of Great Britain and the people of Russia in regard to the redress of grievances. There is no power of free democracy and there is no House of Commons in Russia to which these grievances could be brought and which could give a clear and full decision upon them. Here we have the freest democracy in the world. Go wherever you will and you will not find greater freedom of democracy or a wider spread of the right to vote. Practically we have universal suffrage. I have said before and I say again that if the hon. Member for Bow and Bromley chooses to hold extreme Communist views—

Mr. LANSBURY: I speak at least three times a week, and I say almost identically the same thing as the right hon. Gentleman has said.

Sir W. JOYNSON-HICKS: I want to support the hon. Member and to let it be known far and wide that if those who hold extreme views in regard to property
or anything else in this country can by constitutional methods, by means of the ballot box, induce a majority to put them into power in order to carry out those views, there is nothing unconstitutional in their attempting to do so. If the hon. Member for Bow and Bromley, or if the Communists who are now in prison can, when they come out, so spread their propaganda without these incitements about which I have been speaking, and can persuade the majority that their policy is right, and they come here and form a Government, they will be entitled to put their views into operation, and if I or any other member of the Conservative party then on the opposite side of the House tries to seduce the soldiers of the Crown, who will then be the servants of that. Government, and tries to seduce them against their allegiance to that Government, I should probably be put in prison, and I should deserve it. There is no dispute about that
These men were not prosecuted for holding opinions. They were prosecuted and have been found guilty by a Judge and jury for conspiring to publish and utter seditious leaflets, conspiracy to incite persons to commit breaches of the Incitement to Mutiny Act, and conspiracy to endeavour to seduce from their duty persons serving in His Majesty's Forces. That is very different from mere expression of opinion. I am faced with the verdict of the jury on these counts. The men were well defended. The jury found them guilty and the Judge passed what has been stated in this House to be by no means a heavy sentence. I am asked to do the popular thing. It is so easy. It is said that I am almost every day subject to pressure from various quarters to let various people out of prison. I want the House to believe that that which is so easy for me to do it is difficult and unpleasant to refuse to do. I am bound to tell the House that I cannot see any reason which would justify me in advising His Majesty to revoke the sentences. There is no suggestion that the men, if liberated, would not do the same thing again to-morrow. An hon. and gallant Member has said to-night that they would do so, and has stated that the hon. Member for Bow and Bromley would be implicated with them in assisting them to break the law again.
I do not want to make any threats. I hope sincerely that when these prisoners come out they will devote themselves to the proper and peaceful propagation of their views, that they will do as the great Labour party and the trade unions have done, that is, spread their views by honest endeavour. The Labour party has not grown by dishonest means or by attempts to seduce the Army and Navy. The party has got to its present position because its leaders have convinced millions of their fellow-subjects that their views are right. They have done that through the agency of the ballot-box and the Constitution of the country. I appeal to those who hold Communist views to do the same thing. If their views are right they will succeed; if they are wrong they will not.
I am asked a more difficult question with regard to the Ammanford miners. There were several defendants who had been engaged in a series of riots in South Wales. It is true that I have had the privilege of seeing the hon. and gallant Member for East Rhondda (Lieut.-Colonel Watts-Morgan) on more than one occasion. In addition to that I have received a very important and representative deputation from the Council of the Trade Unions Congress, introduced b.' one of the Members of the Opposition Front Bench. I had a very long interview with them. There is no complaint made here against the conduct of the trial, against the conduct of the police, or as to the justice of the sentences. All that is asked is that I should advise His Majesty as a matter of clemency to reduce the sentences. There are five men who are still remaining in prison. Their names were given by an hon. Member opposite. I think it fairer that I should call them A, B, C, D, and E, though I will give the names if desired. What did I do alter I had seen the Trade Unions Congress deputation? I got the prisoners' names. I sent down to Wales for the whole of the records of the five trials. I went through them with great care, and asked the Judge to be good enough to come and see me. He came and saw me. I went through the whole of the trials with him. I discussed the sentences with him, and I have written a full letter to the Trade Unions Congress in regard to the matter.
Let me remind the House that these were very serious riots. The hon. Member for Bow and Bromley has said that there was provocation. There is always provocation. The first case is that of A. His sentence expires in a fortnight. He was convicted of rioting and stirring up other men. His case was heard by a jury and he was convicted on the two counts. These men were not sentenced immediately their cases were heard. The Judge waited until all the cases were heard, and those who were found guilty were brought up for sentence. This man A was given two sentences of five months each, to run concurrently. The next prisoner B, was one of the guiding hands in the very bad riot on 9th July. He went armed with a heavy stick. There were three separate charges against him and the sentences were six months and six months, to run concurrently, and two months, making eight months in all. The third man, C, was a man about whom very strong testimonials had been sent to me by people in the neighbourhood. He was convicted as one of the leaders of a very hostile crowd, because he personally threatened the safety men in the mines and did his utmost to force them to leave their work. Hon Members know what happens when safety men are taken out of the mines, not merely for the employers but for the miners themselves; the whole place goes to rack and ruin. This man received two sentences of eight months to run at the same time. He had been twice previously convicted on similar charges.
The fourth man, D, was a workman, one of the leaders of the riot of 5th August. The deputy-chief constable was very seriously wounded indeed. The prisoner was heard to say, as soon as the deputy-chief constable was knocked down, "Don't run away. We have plenty here to master this b…lot!" He was seen to throw stones at the police. He has been no less than seven times previously convicted of disorderly behaviour. That is the kind of man who does no one any good. You do not want miners or anyone else to be led by a man who has been seven times convicted of disorderly behaviour. You want to keep the Labour movement clean and pure. It has a very great past, and will have a very great future. The last man, E, was a man who actually knocked out
the deputy-chief constable with a pit prop. The jury found that he was guilty. That man is extraordinarily lucky not to have been indicted on a much more serious charge.

Mr. MACKINDER: A whole pit prop?

Sir W. JOYNSON-HICKS: A great chunk of a pit prop. It was heavy enough and strong enough to knock out the deputy-chief constable in such a way that he might quite well have died. He was in serious danger of death for some days, and but for the mercy of God this man would have been charged on a much more serious charge. What am I to do? I am responsible for the maintenance of law and order. I have the sole and the very unpleasant duty of dealing with the prerogative of mercy. I cannot do what I am asked to do. It is very easy to be popular. I am sure that if I were to do this, hon. Members opposite would, as they say, praise me from one end of the country to the other. I would like to do what they ask, but I cannot. If I had not seen the Judge and gone into the matter thoroughly I might, perhaps, have agreed to the views of hon. Members opposite, but after all the trouble I have taken and the full way in which I have gone into the matter, I cannot, consistently with what I deem to be my duty, advise the remission of these sentences. These men were convicted by juries of their own countrymen. It is admitted that the sentences are not harsh, and so long as I am Home Secretary the men must serve the sentences that the law has imposed upon them.

Mr. MARDY JONES: Will the Home. Secretary express an opinion upon the conduct of the chief constable at Carmarthen, who was responsible for seeing these prisoners taken from Carmarthen gaol to Swansea? Is he aware that. the prisoners were not only handcuffed, but chained together?

Sir W. JOYNSON-HICKS: The hon. Member came to me some time ago during the trial, and I said at once that no prisoners in this country need be chained together while. I was Home Secretary. I communicated at once with the Governor of the prison, who wont quite frankly to the men and said, "There is going to be no attempt to
escape?" They replied, "Certainly," and the handcuffs and chains were taken off them.

Mr. MARDY JONES: I am glad to hear that. It reveals the. peculiar psychology of the police of the county of Carmarthen that they should have thought fit to chain these men together at all. They had no grounds for thinking that the men would seek to run away. For the information of the House I would say that that action on the part of the Chief Constable of Carmarthen was very strongly resented by the miners of South Wales generally. We are not standing up for any action that is illegal, but we do consider that the police themselves ought to show a little more consideration in a matter of that sort. It does not help to smooth matters over just now for the authorities to act in that way. I think the Home Secretary would still be well advised to treat these men with some clemency.

It being a quarter past Eight of the Clock, and there bring Private Business set down by direction of the Chairman of Ways and Means under Standing Order No. 8, further Proceeding was postponed without question put.

GUILDFORD CORPORATION BILL, (By Order.)

Bill read a Second time, and committed.

Mr. CAMPBELL: I beg to move, "That it be art Instruction to the Committee on the Bill that they shall leave out Clauses 52 and 53."
I realise (he importance to the Guildford Corporation of this Bill, and for that reason I have withdrawn my objection to the Second Beading. I have done so with the intention of showing the Guildford Corporation that, whatever may be our views regarding Clauses 52 and 53, we do not want to stand in the way of the main provisions of the Bill, nor do we wish to detain the House unnecessarily in the discussion of a Bill with which we very largely agree. We have put down this Instruction because in our opinion these two Clauses involve proposals for municipal trading, and it is for that reason alone that we wish to have them deleted. Those who have read the Bill
and the statement circulated by the corporation, will have observed that Clause 52 empowers the corporation to sell electricity fittings. [HON. MEMBERS: Why not?"] That I shall endeavour to explain. Clause 53 seeks to confer powers for the establishment of showrooms. It is said that 70 or 80 municipal authorities already possess these powers, and that a precedent has been established. I maintain such is not the case, and that. those powers were obtained by the municipalities mentioned prior to tail up to which date the retail electricity appliance trade was very small and offered no organised opposition. We are told that the Weir Report advocated municipal retail trading in electrical apparatus, but it may be pointed out that this recommendation was not incorporated in the Electricity (Supply) Act, 1922, and the Minister of Transport has been at pains to note the fact.
Having been a trader and a merchant all my life, I am against municipal trading. As a member of the London County Council I have put in a great deal of time there, and I have come in contact with the various departmental heads and their staffs. I have not one word to say against any of them. On the contrary, my experience of the London County Council has led me to realise that there are some first-class men on the staffs there, but these men are great civil servants and not traders. To my mind, they do not know the first essential of trading though they are civil servants and, as I say, are possibly very excellent civil servants. What is the difference between a municipal trading corporation and a private firm? If a private firm does business, as my firm did, it is up against keen competition all along the line. We had to arrange our business in such a way as to be able to compete against all corners. If the transactions which we put through were successful, we made, a profit, but if they were not successful we made a loss, and in any case it was our money or the money of our shareholders with which we were doing business—or speculating if hon. Members prefer that expression.
Take the case of a municipal body which does business. Time is money in business more than in any other connection, and I will ask hon. Members to imagine one transaction of a kind with
which we often have to deal in business. A merchant wants certain produce. I get a telegram to that effect, and my competitors get a similar telegram. It is of the very essence of the matter to reply to that telegram as quickly as possible, because if the other man gets in first with his reply he will probably get the business, even though his price may not be so favourable. That is a case in point which has arisen in my experience in the East, and I have also worked in London, where I found the procedure mainly the same, though on slightly different lines. If a man wants to do business with your firm you must be able to accept or refuse straight away in order to make your trading a success. What happens in municipal trading? In the first place, there is a big difference in price. A meeting of a general purposes committee or some other committee has to be called to know whether it is advisable to take up certain business or not.

Mr. J. JONES: Rubbish.

Mr. DEPUTY-SPEAKER (Mr. James Hope): I would ask hon. Members to allow the argument of the hon. Member for North-West Camberwell (Mr. Campbell) to proceed. They are under no obligation to accept it.

Mr. JONES: I wish to apologise, Sir, but the hon. Member in !advancing his arguments is making allegations which he cannot prove.

Mr. CAMPBELL: When we speak in this House we all try to prove our allegations. Some of us succeed and some do not, but I hope when the Division comes to-night it will show that I have been able to prove my allegations. In any case I am entitled to express an opinion and my opinion is that private enterprise is always better than municipal trading. I was endeavouring to put forward my reasons for that view. I was trying to state that in my opinion time is of great importance, and I maintain that if you do not have, as has been suggested, committee meetings, you in any case have a very big staff through whom these various things have to filter. I myself have experienced, on the other side of the bridge, that decisions have had to be put before committees, whereas, if they had been dealt with straight away, the bargain might have been struck. You have also, in dealing with municipal authorities, a
very high rate of overhead charges, and if you find that you cannot deal on the same basis as competitors, it is comparatively easy to put the balance on the ratepayers, and that is what eventually must always happen when you have municipal trading.
Again, very often in a firm, when business is going badly, you find that you have to make various cuts, right and left. You find that your staff is not as good as it might be. I realise that it is sometimes quite difficult for a man to get on to the staff of a corporation or into the Civil Service, but when a man is once there, I think we all realise that it is extremely difficult to displace him. I have had personal knowledge of cases where a man, admittedly, is not as good as they had hoped he would be, but he having passed his examinations and got into the position, it needs almost an Act of Parliament to get rid of him, and that is not to the benefit of either the municipality or the work which they are carrying out. If it is agreed to-night—and I sincerely hope it will not be—that this Guildford Corporation is allowed to deal in the articles mentioned in the Bill, where is the end going to be? Is this not the beginning, or I should say the carrying on, of not only municipal trading but national trading? What is going to prevent this self-same Corporation on a future occasion suggesting that they should have leave to sell other things? I maintain that this country has made its name, its reputation, and its credit through its private enterprise, and I, therefore, have very great pleasure in moving that it be an instruction to the Committee to delete these two Clauses.

Sir HARRY FOSTER.: I beg to second the Motion.
The Clauses which we desire to take out of this Bill are very wide, and the objection to them is the objection to the principle which they embody—namely, that they seek to extend rate-aided trading in competition with, and gradually to the extinction of, private enterprise. Two quite recent attempts in that direction have been rejected en Second Reading in this House for that very reason—namely, the Municipal Milk Bill and the Omnibus Bill. My hon. Friend the Member for North-West Camberwell (Mr. Campbell) referred to
the genesis of this principle, under which something like 70 corporations got rights down to the year 1903; and the House knows that from 1912 onwards it, was the practice of this House to insert the Clause called the House of Lords Model Clause in similar Bills. I would call the attention of the House to an interesting discussion which took place in another place last year in connection with the Burnley Bill, and as the result of that discussion, in which it was suggested that there ought to be a Joint Committee or some similar inquiry set up in order that this question of municipal wiring and sales should be settled once for all, the Marquess of Salisbury, the present Leader in another place, undertook to bring this suggestion to the notice of the proper quarters. I do not quite know what that meant, but I understand that down to this moment nothing whatever has been heard of that suggestion. I suggest to the House that that would be a proper and an admirable way of dealing with that question, and that before the business of private electrical firms and contractors in this country, employing capital which is estimated to amount to about £3,000,000, is subjected to what I suggest is unfair, rate-aided competition, it is right that such an inquiry should be instituted and the whole question thoroughly investigated.
I submit again for the consideration of this House that it is not in the public interest to create fresh battalions of either State or municipal public officials, and particularly when some of those officials are to be engaged, as is suggested in one of these Clauses, in wiring private houses and factories and selling electrical apparatus in semi-State shops. The public views with grave concern the existing great army of such officials, and we are hearing again and again, in this House and outside, measures urged for the purpose of reducing that number of officials under which we are State and municipal-ridden. There is another suggestion that I would put to the House, and that is on the question of labour troubles. We are not unfamiliar with them, and we know what a very serious matter it is to the whole community when a labour trouble arises in that which is an essential industry to the very life of the community. It frequently happens that under the present arrangement the wire-men employed by private electrical con-
tractors have gone on strike without involving the electrical workers in the electricity supply stations, but if all the electrical workers in a town were employés of the municipal authority, a strike taking place among the wiremen, in daily touch with that centre of unrest, the building trade, would quickly provoke a sympathetic strike among their fellow employés. The result, of course, would be that the town would be plunged into complete darkness during critical labour troubles, and there is no hon. Member on the opposite side of the House, whatever may be his views and sympathies with regard to labour, who would look with calmness, and certainly not with pleasure, at such a state of things. [Interruption.] I hope my hon. Friend will try and restrain his emotion, and that if he must talk, he will talk to himself. I am sure he does not want to put me off in any argument that I may consider worth putting before the House.
Under present arrangements electrical contractors are organised all over the country to keep the electrical power stations running during periods of industrial unrest. Five years ago electrical contractors in Glasgow manned the Glasgow Corporation electricity station for 24 hours, thus maintaining the supply during a very citical period, to the advantage of the whole of the inhabitants of that great city. I observe with regret that the Municipal Corporations have circulated, according to their custom, the town clerks of all the corporations in the Kingdom, asking them to communicate with their Members to support this Bill, and that automatically the town clerks have communicated with their Members accordingly. I confess that when I first came back to this House, I was not familiar with that machinery, and I was foolish enough to think that my constituents desired that a particular Measure should be supported or should be opposed. I found out afterwards, and I learn now, that, so far from that being the case, the electors—for example, the electors in Portsmouth—knew nothing whatever about the communication that was either being made to the town clerks by the Municipal Corporation, or the communication which was being made by the town clerks automatically to the Members for Portsmouth, and, therefore,
they conveyed not at all the ideas or wishes of those represented in this House.
Communications have been sent out in which the American example is quoted, and I wish to show the House that that is a most misleading reference. It is quite true that in the Weir Report—a most valuable Report in many respects—there is a statement made that the sale of electrical apparatus is carried on by American electricity supply undertakings, and that similar activity should be indulged in by British electricity supply authorities. But the fact is, first of all, that America is, as we know, the home of private enterprise, and, secondly, in the United States all the supply undertakings of any consequences are operated by private companies, and not by municipalities, and that some of these electricity supply companies sell electrical apparatus, but, as my hon. Friend pointed out, for the purpose of earning dividends, and selling the apparatus at the proper retail price. In this way, they do not smash the business of private traders, who are able to compete with the supply company on level terms. Electrical supply manufacturers and retailers are welcomed by the supply companies. There are hosts of electrical shops in all American cities. If I may contrast that with the position here, electricity supply here is largely in the hands of municipal authorities. There is no incentive to earn a profit, and no incentive to follow the ordinary usages of trade and commerce.
Electricity supply undertakings are in the hands, for the most part, of the chief engineers. Any loss must fall on the rates, or increase the price that all consumers have to pay for their current. The Coal Report emphasises the fact that it is impossible to prevent municipal trading losses being made good out of the rates. In a private undertaking, successive losses can only end in one way—in the bankruptcy court. In a municipality there is the bottomless purse of the ratepayer to meet those losses year by year as they arise. [HON. MEMBERS: "What losses?"] What losses are incurred in London by the tramways, for example? I am talking about municipal trading, and I am submitting that if there be a loss on any municipal trading, that loss inevitably falls upon the. Ratepayer, But the business still goes on; whereas, if it were in private hands, the
balance-sheet would tell its own tale, and a concern which was being carried on at a loss must eventually come to an end. The conditions are not equal. The incentive to profit is not the same, and I am sure the tendency, which this House has condemned recently more than once, as I mentioned a few moments ago, to increase municipal trading is against the public interest, and on that ground we desire these Clauses struck out.
Municipal losses, as I have said, fall upon the bottomless purse of the ratepayers, and as an illustration of that fact—and I commend this to the consideration of hon. Members opposite, if they are not obsessed with one idea only, namely, on every conceivable occasion to increase municipal trading or nationalisation, to both of which policies, as they know, we are opposed—as an illustration that it is not necessary for a municipality to have these powers, I would quote the case of the Newcastle Electric Supply Company, which is one of the biggest supply authorities in the Kingdom, and they place all their wiring in the hands of private contractors.

Mr. R. RICHARDSON: They charge the consumers.

Sir H. FOSTER: I know that to hon. Members opposite the consumer ought always to have something supplied to him, and if there is a deficiency, it should fall on the shoulders of somebody else, and the shoulders are those of the ratepayer. [Interruption.] Hon. Members need not be so restive. After all, I am only trying to state as clearly as I am able to do the view we hold, and why we object to this system. There has been remarkable progress in electrical development in this country, due very largely to the private contractors and the electrical engineers, and I would like to conclude by reading a statement by a well-known authority, Mr. W. W. Lackie, late chief engineer of the Glasgow Corporation, and now one of His Majesty's Electricity Commissioners, who recently said:
Electrical contractors are the best canvassers an electricity supply authority can have.
From intimate personal knowledge and sincere conviction, I can testify to the important part which the electrical contractors of this country have played in connection with the development of electricity supply.
Without fear of contradiction, I say that the work of the electrical contractor is just as important as the establishment of capital stations, main transmission lines and distribution net works. I hope and believe that all enlightened authorised undertakers will see the wisdom of recognising the electrical contractor, and of leaving him undisturbed to pursue his legitimate and excellent activities in his own sphere which belongs to him.
If that quotation had been the other way hon. Members opposite would have told the House at once, and would have said what an indeniably recognised authority he was. Undoubtedly Mr. Lackie is a great authority, one of great knowledge, and independence. That is his estimate of the importance of doing nothing to squeeze out of existence this worthy body of men. It is upon a sane and wholehearted co-operation between public supply authorities and the electrical engineers that the future supply of electricity in this country depends. I thank hon. Members opposite who have allowed me to put. forward views which I know are diametrically opposed to theirs, who have courteously and patiently listened to my case.

Sir HENRY BUCKINGHAM: I should like to repair an omission by the Mover and the Seconder of this Motion. It is to apologise to the House for taking up the very valuable time of a Private Member's night in discussing a somewhat comparatively trivial matter of solely domestic interest to the town of Guildford. I myself am sorry that the time is being spent in this manner over the subject, for the discussion, in my opinion, and, I believe, in the opinion of a great many Members, is far more suited to discussion upstairs than on the Floor of the House. I agree with a good deal of what has been said by hon. Members who have already spoken. I am not standing here to-night in a. white sheet. I am not in the least ashamed of rising to oppose the Instruction that has been moved by my hon. Friends, because I think the House has been led away entirely on this question of municipal trading. The present question is not a question of municipal trading at all, but purely a matter of business. I am supporting it, and I am opposing the Instruction because I feel perfectly satisfied that if these Clauses are passed it would mean good business for the town of Guildford.
I am not likely, I think, to be accused of helping to promote a Socialistic Measure. The Mover and the Seconder of the Instruction very wisely did not go into that matter, because it would have been really too humorous for Guildford to be accused of wishing to do anything in any sense Socialistic. It would have been very humorous to find me rising in Lay place as Member for Guildford to support anything Socialistic. I am not supporting anything Socialistic, but something which is really good business. One hears occasionally of hon. Members on the Labour benches and on the Liberal benches accused of what is called "political obstinacy" in that they follow Free Trade or some other principle of the kind, stick to it through thick and thin, and nothing will make them change their minds. Really, I am beginning to think that there are some people beside me on these benches who are just as obstinate in this question of municipal trading as are some hon. Members opposite in their political views.
The real fact of the matter is that the town of Guildford does not desire anything Socialistic. They do not desire any municipal trading. But the town of Guildford fortunately for the citizens, is governed by a very businesslike and enterprising council, and they want the powers for which they ask in these particular Clauses of the Bill to enable them to develop their electricity undertaking, full responsibility for which they accepted some four years ago. They are at present unable to develop that under-tiling with sufficient benefit to the citizens of Guildford unless they are given the natural evolution of the powers they now possess by these new Clauses.
The hon. Member for Portsmouth Central (Sir H. Foster) tried to frighten the mayor, who is in the Gallery upstairs and the citizens of Guildford, by some tale of the awkward things and strikes that would happen if the two Clauses were accepted by the House. I think on behalf of my friends who, I believe, are upstairs, I cm assure the House that we in Guildford are taking all these ideas with calmness and equanimity. I am not at all ashamed of what I am doing. I have explained why, and I believe I am doing it as a matter of business. I am also doing it for a reason which the
Mover and bewilder did not mention to the House, and that is that this matter has been the subject of a good deal of discussion in Guildford, having, in fact, been submitted to a poll of the ratepayers of Guildford—than which nothing could be more democratic! The result of that poll was, in round figures, that two-thirds voted in favour of this Bill and one-third against. Therefore, I maintain that I should not be fulfilling my political duties to my constituents if I did not help all I possibly could to carry out the wishes of that great majority. All I am asking for is that these Clauses should be in the usual way sent for discussion to Committee. They would go before a Committee experienced in dealing with this and similar matters. The opponents of these Clauses, or any other Clauses, would have every opportunity of putting their case professionally and thoroughly before that Committee. It is with the greatest regret that I have to speak here on the Floor of the House. on matters which I consider are purely matters of domestic concern.
Let me remind the House of one or two facts connected with these contentious matters. First of all, let me say that local authorities which are authorised to provide gas are almost on every occasion permitted to sell gas fittings. The same applies to corporations who provide water. They are permitted to sell water fittings. Therefore I fail to see any reason at all why, if a corporation is endowed with powers that Guildford has, to run a supply of electricity, it should not have further powers. It would be utterly unreasonable that they should be debarred from providing electrical fittings and other matters that go with it. The subsidiary powers are the logical sequence of the powers already given. Such a logical sequence is particularly necessary in a growing district such as Guildford is, where a very large number of small houses are springing up. In these modern days all those small houses ought to be wired and equipped with electricity. In many cases the occupiers or the owners of such houses are not able to put down the necessary capital to pay for the installation, except upon the deferred payments system, and local contractors will not as a rule put in electric installations on such terms, and the result is that many of these small houses now
being erected are deprived of all the benefits of electricity. We know that the encouragement of the use of electricity is the generally accepted policy of the Cabinet, and we are awaiting with interest the production of the Government's Bill on that very matter. One thing which should encourage the use of electricity is the removal of restrictions. Reference has been made already to the Report of the Committee appointed to review the National Problem of the Supply of Electrical Energy, and I would like to read a few lines from it. In paragraphs 103 and 106 the Committee say:
There has in the past been a serious lack of organisation in the encouragement of the use of electricity, especially by domestic consumers, which compares most unfavourably with the great enterprise shown in America…Partly the restrictions are legislative. Host local authority undertakers are prevented by their Acts from selling ally electrical apparatus. No such restriction exists in America, and it should he removed here. All undertakers should he encouraged, not only to sell apparatus, but also to provide show-rooms and exhibit appliances with which they can demonstrate the numerous practical applications of electricity in the home.
Those words are not mine. They are the words of this committee, the chairman of which was Lord Weir, and I am certain no one in this House, certainly no one on the benches opposite, would ever accuse Lord Weir of being a Socialist, and I have never heard that Lord Forres or Sir Hardman Lever, the other members of the Committee, are tainted with the terrible sin of Socialism.
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I know that one of the objections raised against these Clauses—it is raised by the association which has briefed my hon. Friend opposite—is that the grant of these powers will mean considerably increased competition with local contractors. Of course it will, and it is the best thing that could happen to the local contractors. I have been in business for 40 years as a merchant and a manufacturer, and I have never yet regretted any fair competition. The more competition there is the better for everybody engaged in the particular trade. There is not the least doubt that there will be competition, but the competition will be perfectly harmless to the local manufacturers, because the result of this Measure will be such a boom in electrical fittings, the
wiring of houses, and so on, in the Guildford district that there will be a great increase of work in which everybody engaged in the trade will benefit. An hon. Member declared that the local contractors will suffer extinction. He used the wrong word. The local contractors will suffer from extension.
At the present time there are 80 local authorities possessing the powers for which I am asking to-night, and I do not think I am breaking any confidence when I say that one more was added to the list to-day in the Committee room upstairs. It would be rather hard when there are already 81 authorities possessing these powers that the town of Guildford should be deprived of them. I was rather amused when I received to-day a circular signed by a certain number of hon. Members of this House, including the hon. Member for Fulham and the hon. Member for the Moseley Division of Birmingham (Mr. Hannon), both of whom represent constituencies where the local authorities already possess these powers. I appeal to all reasonable men—I am not appealing to my hon. Friend the Member for Moseley, or my hon. Friend the Member for Fulham—if he were here—because they are unreasonable—and ask them can they imagine anything more unreasonable than to attempt to deprive another constituency of the very benefits which their own constituency has? I appeal to all hon. Members representing constituencies possessing these powers to be consistent this evening and vote for Guildford to have the same powers. I have tried to show that these Clauses are not socialistic, but that they are beneficial, and are desired by the citizens of the borough; I have tried to show that they will help to remove restrictions on the larger use of electricity; and I have tried to show that they will in no way injure local contractors, and for all these reasons I ask the House in its fairness to reject the Motion.

Mr. ATTLEE: I rise to support the hon. Member for Guildford (Sir H. Buckingham) and the Guildford Corporation. I hope that every time a Bill of this kind comes before us we are not going to have an attempt to prejudice the fair consideration of the question by a lot of talk about Municipal Socialism, and so on. I rather suspect that when that is done the other side have an extremely bad case. It
certainly seemed to be so in this instance, judging by the amazing statements made by the hon. Member for North-West Camberwell (Mr. Campbell). He told us how municipal electricity undertakings work. We gathered from him that they could not sell an article without having a meeting of the General Purposes Committee.

Mr. CAMPBELL: I said they could not change their prices.

Mr. ATTLEE: They cannot do anything, apparently. I might just as well say that a limited company cannot sell a. single article or do anything at all without a meeting of the shareholders. As everybody knows, a municipal undertaking is carried on by a skilled engineer a ad manager, a man who has been trained and equipped and who very often passes from the service of a company to that of a municipality, or goes from municipal service to a company's service. They know their work and they are given a free hand, and when hon. Members opposite use arguments like those which we have heard to-night, it shows that they have not got a very good case. I happen to be the chairman of a local undertaking, and I am sure' we could not run it on the lines which have been laid down by the hon. Member for North-vest Camberwell. In these cases all you have to do is to get a skilled manager and trust him, and he has power to buy and sell, and it is only on large matters tat he has to consult the committee.
It has been represented to us that Guildford is a very businesslike corpora-on and I agree, for it is only recently that that town has gone into the electric supply business. Up to a short time ago Guildford was supplied by a company. The result was teat there was a large number of breaksdown, they did not pay any dividends, and they did not reduce the price of electricity. The town of Guildford decided to take over this business, with the result that up to now it has raid its way, and there have been no more breakdowns. Besides this the price of electricity has been reduced from 11d. to 7½d., and there is another reduction due next month. Therefore, the statement which has been made to us, that this is a business proposition put forward by a businesslike corporation, is quite correct. I am sure that the hon. Member for Portsmouth will be glad to
hear that his constituency is, according to its return in the Municipal Annual, "fortunate enough to possess remunerative concerns dealing with tramways, motor omnibuses, and other forms of municipal enterprise, and have placed £7,500 to the reserve fund and £10,000 to the relief of the rates."
A considerable point was made with regard to the action in another place that had occurred with regard to these particular clauses. Let us consider the history of that. For many years it was quite common form to allow municipalities with electricity supplies to run show rooms and sell apparatus, but an association of contractors took up arms against this, and they managed to get these powers struck out of Bill after Bill. On this point, however, the information was not carried up to date. We have been told that nothing has been done in this matter since that time. I would like, however, to remind the House that a strong Select Committee was set up, the chairman of which was very strongly prejudiced against municipal enterprise. That Committee came to the conclusion that it was right and just that municipalities should have these powers. When we get a recommendation of that kind put forward very strongly by such a Committee, we want something more than the arguments we have heard here to-night to induce us to turn down the request made to us by such a highly respectable Conservative municipality like Guildford.
We have been told that if these proposals are adopted the municipality will come into contact with the terrible Bolshevists connected with the Building Trade Union, who may take strong action and plunge the town in darkness. What happens in company areas to-day? They have these powers. They are doing the same kind of work, and they have to come into contact with the Building Trade Union, and yet nothing very serious happens. What about the gas companies? They have to run all these risks and they put in this apparatus, and nothing of the kind suggested happens in such cases. It has been said that this Bill will knock out the poor independent contractor, but there is nothing in these Clauses which gives a monopoly either one way or the other in regard to the supplying of electrical apparatus. The great desirability of having competition in these matters has already been referred to. I
have tried to find out whether it is really true that if these powers are granted some blighting hand will descend on the contractors and they will disappear. Nothing of the kind has happened.
I have seen a report from an engineer of one of our municipalities that has perhaps gone further into this selling business than most corporations, and he says that he works in the closest harmony with the contractors. He also informs me that despite the large amount of his sales, and they are very large—they jumped up from £12,000 a year to £40,000—tillers is only one contractor in his district who objects to these sales by the corporation, and the others are doing very good business. As a matter of fact the business of those contractors has increased in consequence. What happens is that municipalities who have the benefit of these Clauses do a large amount of advertising business both for themselves and the contractors. The municipality runs the central showroom and the publicity department, and the work of selling electrical apparatus is stimulated both by the council and other agencies. It is noteworthy that those who have opposed these Clauses have not adduced any evidence of their contention that they would mean a heavy loss on the rates. I know they were speaking on behalf of the Contractors' Association, but I would like to remind them that the Guildford Corporation have put into their Clauses a restriction in regard to What has been called unfair competition.

Sir H. FOSTER: Is provision made in these Clauses that there should be power to deal with overhead charges.

Mr. ATTLEE: The Clause is perfectly clear, and if hon. Members wish it to be made stronger in Committee there is no objection to that, and no doubt the Guildford Corporation are quite ready to make it a perfectly watertight Clause. The hon. Gentleman opposite tried to raise the bogey that this is the thin end of the wedge of municipal Socialism. As a matter of fact, it must have got pretty thick on the wedge by this time, because, as has been pointed out by the hon. Member for Guildford, this has gone on in many towns up and down the country for years. We have not had any complaint from Birmingham, although possibly we may get a complaint against the
Birmingham Corporation from a representative of Birmingham here to-night. They have these powers and, as far as I know, they exercise them very well. I am not aware that there are no electrical contractors in Birmingham; I believe it would be found that they are carrying on their trade quite well, despite the Corporation's powers.
An attempt was made to say that the Weir Report did not really touch this matter, but was referring to America or something of that sort. The Weir Report is at least a business man's Report, and it touches upon the two obvious practical instances in which these powers are necessary. Hon. Members will notice that they are both cases affecting the smaller type of consumer—the man of small means, for whom it is most desirable that the supply of electric power and light should be extended. The first is the question of hiring. A great deal of hire-purchasing is done, but, although simple hiring can be dons without these powers, if it is desired to carry on a hire-purchase system these powers are necessary. What happens is that a piece of apparatus is hired, and, after a few months, the consumer says, "I like this very well, and should now be glad to buy it"; but the corporation have to say, "We are very sorry, but we cannot do that. You must go round the corner and buy it from someone else," and they have to take back the part-worn piece apparatus, which is useless to them.
The second point is that there are contractors and contractors, Some contractors are in a large way of business. I was speaking to one of the largest to-night, and he was strongly in favour of the attitude taken up in favour of this Bill. But there are also very small contractors, who live, necessarily, in a more or less hand-to-mouth way. If you want to eater for the smaller consumer, you have to bring the apparatus, by some means, within his financial capacity, that is to say, by weekly or monthly payments. The ordinary small contractor is not in a financial position to do that, but the municipality can do it. That part of the work is not work that is taken away from the contractor; it is simply work that would not be done if the municipality had not these powers. That is why it has been pointed out that, along with the contractors continuing their work,
you get a very great development of a different type of work. I think it is too late in the day to say that we will not have any municipal trading in electricity. The big towns of the country are not going to stand that. I do not think for a moment that the Birmingham Corporation would stand it. What is happening here is really this: You are going to say that experience has found certain powers of sale to be necessary in order to complete the businesslike arrangement of these undertakings which municipalities have been allowed to take up, but that you are so much frightened of municipal trading that you are prepared to hamper them by not giving them this Clause.

Mr. HANNON: We should like to see their balance-sheets.

Mr. ATTLEE: If the hon. Member will make an appointment with me, I shall be delighted to take him round and show him the accounts of the Stepney Borough Council at any time. It really is not fair to raise all sorts of mad points about strikes and so on, when everyone knows that the companies have these powers. Why do you not ask that the companies should not have these powers? If you are so fond of the contractor, have you no sympathy for the contractors in the companies areas who have been squeezed out by the companies that are doing their own wiring and selling their owl apparatus? That is not done because hon. Members know that it is not logical. The case put forward by the hon. Member for Guildford is a businesslike case, which has been recommended by a thoroughly businesslike committee, namely, the Weir Committee, which is following out the principle that has been adopted by all the chief municipalities in the country, and which is following out the recommendations of an extremely strong Select Committee of the House of Lords. I do suggest to this House that it is better to fall in with those views, and allow Guildford to manage its own business in the way that it has shown itself so capable of doing, rather than that hon. Members should allow themselves to be driven into the other Lobby by some bogey of municipal Socialism.

Mr. MACQUISTEN: The hon. Member for Guildford (Sir H. Buckingham) is not able to use his own discretion in speaking to the brief of the Corporation
of Guildford. I suppose it is as much as his political life is worth to oppose that august body, which controls his political destinies. It may be a Conservative body, but certainly I think the applause with which the sentiments uttered by the hon. Member for Guildford were greeted on the other side ought to have made him question whether he could consistently follow them. He used the word "business," and the hon. Member for Limehouse (Mr. Attlee) always talked about "a business proposition." It reminds me that when in the Courts you hear a gentleman saying that everything is in his favour, it always means that he has a very bad case in law. The hon. Member said he did not object, even in his own business, to fair competition. I do not know what the hon. Member's business is, but I would say this, that he would very much object to being rated by one of his business opponents, and to part of the rates he paid being used as the capital of his business opponent. He would be the first to squeal, and to say that that was not fair competition; and that is the position here. It is true that they make a profit out of it—

Sir H. BUCKINGHAM: My hon. and learned Friend is entirely misinformed. There is no charge whatever on the rates of the Corporation, and a very large profit is made.

Mr. MACQUISTEN: On the capital provided by the rates. [HON. MEMBERS: "No!"] Many a corporation starts very well, but finishes very badly. You see that in all the corporation' tramway enterprises—they start splendidly, but generally finish badly. It may be that Guildford may be able to carry on for a number of years. The last speaker said that a very good account had been given of these municipal enterprises, and that is quite right. He said that they are carried on by engineers, and it is these engineers who always wish to magnify their position; they want their salaries and their emoluments, and they are at the bottom of all these attempts to get a bigger development of particular departments. They are quite right. I am not blaming them; I would do exactly the same myself, and so would everyone on the other aide. But it is our business to see that these things do not happen, and
that local authorities stick to the business for which they have been elected.
Corporations get these powers because they are monopolies. If electricity could be transmitted by wireless, if you did not have to pull up the streets, and lay mains, and all that sort of thing, you would not have the corporations taking up this business; it would be done more or less by private enterprise, and Parliamentary Bills would not be needed. It is not so much that I am afraid of Guildford being a Socialistic town council, but when these places get an opportunity of doing something on their own account, with their own officials, they are very apt to fall from the narrow path. Even in this case, there is no need for these powers, because there are already a dozen contractors, who are well able to do this work and employ between two and three hundred men. It is said, of course, that business will greatly develop. There are already 4,000 consumers in a population of 27,000, a very good percentage using electricity already. The hon. Member for Guildford referred to the poll, but not 25 per cent.. of the electors voted at the poll. I think there were only 3,000 out of a population of 27,000. That cannot be said to be a very heavy poll. What is even worse, and shows that even a Conservative municipality is not very decently minded, is the fact that these contractors asked to be heard before these Clauses were proceeded with by this Conservative corporation, and that they were refused a hearing and did not get an opportunity of stating their ease at all. That was not very sporting or judicious. They ought to have given these gentlemen an opportunity of stating their case, but they did not do it. That being so, their views ought at least to be heard here.
The Corporation, too, was almost equally divided. A member of the Corporation proposed that these particular obnoxious Clauses should be deleted. Ten voted for the deletion and only twelve for their retention, so that you are representing very nearly 50 per cent. of the Corporation of Guildford when you throw out these Clauses. I am perfectly sure that these 10 gentlemen will have something to say to the hon. Member for Guildford. It is said that waterworks have these powers, but I have
yet to learn of waterworks that go laying pipes through the houses. They do not do anything of the kind; you cannot get your water into the house without plumbers. The ordinary plumber under private enterprise is dilatory enough. We all know that when he comes to his job he has to wait while he sends the boy back for something, but a municipal plumber—!
In the same way only a comparatively few of the corporations supplying gas lay the pipes through the ratepayers' houses. The vast majority of the work is done by private enterprise. This municipality merely wants to start shopkeeping. It is a wholly unnecessary business for them to engage in. Moreover, I must call attention to the fact, for the benefit of the Member for Guildford, that in Clause 52 (3) of the Bill they are seeking to alter the common law of the land. It is one of the features of the law that, when a particular article is affixed to the freehold and becomes part of the building, it shall not be taken away because it belongs to the property, yet they put in a Clause which says that, notwithstanding that they may be fixed or passing through any part of a premises, all electrical fittings shall continue to be the property of the corporation. They are going to get special privileges that no other person can have.

Mr. J. JONES: What about hired furniture?

Mr. MACQUISTEN: If my hon. Friend nails his furniture to the floor, then the cases will be similar and it will be a freehold. One of the principal objections to this Bill is that municipalities are not progressive. Occasionally when a thing has been proved then they come in, as the Government come in, and reap where others have sown. Electricity is a growing science, further developments are always being discovered. It is inevitably a thing to be left to the genius of private enterprise. It is not for municipalities. It may be right that they should generate it and supply it through the mains in the streets, but it is a wholly wrong principle that they should engage as retail shopkeepers employing large bodies of tradesmen. There is always the risk that is bound to come, as it has come in the tramway systems of corporations, that 'heavy burdens will be placed upon
the rates and that ratepayers in the particular town engaged in this enterprise will be subject to unfair rate-aided competition.

Mr. ELLIS DAVIES: The principle of municipal trading has been so of ten debated and approved by this House in the last 20 years that I could not understand the hon. Member opposite arguing against it. In view of the fact that a municipal authority in Birmingham is actually carrying on a municipal bank, it seems to me rather late in the day to argue against the principle. The question to-night is whether the Corporation of Guildford should have certain powers, and I am interested in the principle because there is a Bill before the House from the chief town in my constituency, Colwyn Bay, containing the same Clause. The question we have to decide is not whether or not we should have municipal trading in this country, but whether this particular town is to have the powers obtained last year by three other corporations, Bath, Barrow-in-Furness, and Burnley, under their Bills. I do not quite understand the objection of the Mover of the Instruction to-night, for it has already been pointed out—

Mr. MACQUISTEN: May I ask the bon. Member if he is aware that, before a Committee of the House of Lords the other day, the Colwyn Bay engineer confessed that he did not know whether a particular section of his undertaking was making a profit?

Mr. DAVIES: The Committee of the House of Lords passed the very Clause to which he takes objection to-night. All the corporations have, as a matter of common form in their Bills at the present moment, the right to sell gas fittings. I fail to see on what principle it can be argued that it is right to put it in as a common form for all municipal corporations to sell gas fittings and that it is a right principle also not to allow them to sell electric light fittings. No distinction can be made between them, and for that reason I shall oppose the Instruction.

Sir COOPER RAWSON: My Friend the hon. Member for Guildford (Sir H. Buckingham) said that he did not appear in a white sheet, but he appears to have adopted the undervest of Micawber,
because he anticipates good business in the future and hopes that something good will turn up. It does not follow necessarily that, because he is successful in Guildford in electricity supply, he is necessarily going to be successful in the supply of electric fittings. A document has been circulated in support of the Bill, and I only want to deal with two points in it. One point they make is that permission has been given to various municipalities all over the country. It is because of the general principle that 1 and many others on this side object to this principle of municipal trading. Because power has been given to municipalities in other parts of the country, that is no reason why we should participate in the continuation of this pernicious doctrine all over the country.
Another point they make is that power for local authorities to supply gas and water fittings is exceedingly common. My experience of a local authority which has power to supply gas and has a quasi monopoly is that your selection of stoves and other things that are necessary in connection with the gas supply is much more limited than if private enterprise were given a free hand, and we can anticipate the same thing if you get a monopoly in a small town like Guildford. It is very different in a great city like London, where you have private. enterprise which can supply all kinds of different patterns of instruments for use with gas or electricity. These public authorities compete unfairly with private enterprise. It is very easy to bring forward figures prepared by local authorities to prove that a, profit has been made, and it is very easy, by not debiting the undertaking with an adequate amount for overhead charges, to show a profit. The accounts of private enterprise companies are audited in a proper manner, under an entirely different system from those of public undertakings.
I base my objection on the ground that municipal trading is not one of the proper functions of a municipality. The functions of a municipality are to look after the health and the public services of the municipality and not to go in for trading and compete unfairly with private enterprise. Wherever State or municipal enterprise has been undertaken, the work has generally been carried on much less
efficiently and much more extensively than it could be done under private enterprise. I do not expect hon. Members opposite to agree with me. That is not ply object in rising. My only object in rising is to support the abolition of these two Clauses and to support the private people in Guildford who want to set up in business, and to protect them against the monopoly of the municipality.

Mr. J. JONES: It was like a breath from the briny to listen to the last speech. The hon. Gentleman comes from Brighton, which has done more municipal trading in proportion to its population than almost any other town in Great Britain.

Sir C. RAWSON: It is an exceptional place.

Mr. JONES: If the principle you are standing up for really represents your ideas, you ought not to be the Member for Brighton.

Mr. DEPUTY-SPEAKER: It must not be assumed that these are my ideas.

Mr. JONES: I know your ideas, Sir, are far more advanced than those of your Conservative Friends, because you represent a City which has more progressive ideas. But municipal trading is not a matter of whether you believe in it or not. It is a fact. It is here, and most of the great towns and cities have discovered that it was a bad policy for them to allow themselves to be at the perpetual mercy of contractors. Some of us have gone through it. I have been for a quarter of a century a member of a local body in the East End of London which used to be a happy hunting ground for contractors. But we have wiped them off the slate. We can provide the people with electricity cheaper than any other power can be provided. We have beaten private enterprise with all the power of the Government behind it, and with all the opportunities of raising capital, and we are providing cheaper electric power and light than the private companies. We are limited within our own radius. We cannot go outside. They can go where they like. In spite of that, we are selling our electric power, light and heat 20 per cent., on the average, lower than they are.

Sir C. RAWSON: What are your rates?

Mr. JONES: What have the rates to do with electrical supply? It just shows
that our Friends opposite know as much about electrical development in our great towns and cities as a Connemara pig does about astronomy. Our electrical undertaking is paying all the charges of money raised on loan, and everyone who has put his money into it has his percentage of capital back, and in addition we have £17,000 profit, on the average, for our electrical supply, the profit not going. into the profits of shareholders, but into the pockets of the ratepayers.

Mr. MACOUISTEN: Do you sell fittings

Mr. JONES: I cannot for the life of me understand the hon. and learned Gentlemen, more honourable than learned on this particular subject. He knows more about the law than I do, but I know more about roads and electricity than he does. He is talking about cutting up the roads. That is one of our great troubles with private enterprise. In the old days in London we had the water company cutting the road up one day and the gas company the next, and the roads were always in a state of chaos. The hon. Member yesterday talked about roads in Argyllshire. Private enterprise could not solve the problem of transport. Nothing could be done, and he wanted the Government to come and help them. Now he tells us a municipality must not help itself. Logic, of course, is supposed to be the peculiar forte of a Scotsman.

Mr. DEPUTY-SPEAKER: The hon. Member appears to be travelling a little far from the electric lighting of Guildford.

Mr. JONES: It is necessary sometimes to have a little light on the subject. It is not a mere matter of whether one place or another ought to have these powers. The hon. Member who seconded the recommendation for the rejection of these Clauses comes from a town that is built up on State enterprise—Portsmouth. I have received representations from Portsmouth objecting to the discharge of men from State workshops and saying that if the dockyards are closed and we reduce our armaments, if we try to interfere with the great Government establishments which have built up for hundreds of years our supremacy in the matter of naval power, the world is coming to an end. State
enterprise has made the very town the hon. Member represents. Surely we have a right to say, if Portsmouth has the opportunity of development built on State resources, why cannot Guildford, if it is willing to take the risk, have an opportunity of carrying on its public enterprise.
One charge against the municipalities is that they have no enterprise, and yet whenever a Bill comes forward in this House, the object of which is to give them a chance to show their enterprise, certain enterprising gentlemen on the opposite side of the House protest and say they must not be given the power. We ask for the opportunity. A private company can come into West Ham tomorrow and set about doing the work we are doing, but they cannot do it because they cannot do it nearly so well. We pay our men better wages than private enterprise pay their men. We work our men shorter hours and give them better conditions, and yet private enterprise claim that they are the only people who can do things under the best conditions. From Aldgate pump down to Barking Broadway we can beat the contractor every time in the supply of electrical power and light. Go to the West End at d see what people have to pay for the simply of electricity.

Mr. MACQUISTEN: And for everything else.

Mr. JONES: I do not know what things the hon. Member enjoys there. I do not have the opportunity of going to night clubs. The charge made against the municipal authorities in regard to electrical supply is that we are not enterprising, and yet we can beat private enterprise 50 per cent. all the way from Aldgate Pump to Barking Broadway. There our enterprise is such that we can heat private enterprise in the West End in regard either to electrical equipment, power, heat or light, down to a frazzle. There is nothing that the capitalist can de for the people which the people, organised, cannot do better for themselves. Every time a Bill is brought in or. behalf of a municipality, we find opposition. We have to come here and ask for powers to do this, that or the other. Why should not private companies come here, and why should not the contractors come here and ask for powers, seeing that the municipalities are com-
pelled to come here? When we come here and ask for powers we are met with antediluvian arguments. We get the Noah's Ark grandmother argument against us.
Guildford is only asking for a little. She is asking for what every other great municipality in the country has already got. I would like to see some of the hon. Members who have spoken against this Bill going to their own constituencies and talking against the powers which the municipality there already possesses. If it is wrong for Guildford to have these powers, it is wrong for Portsmouth to have them. These hon. Members go before their constituents as representatives of the public, but they come to this House and speak as representatives of private companies. They have their briefs both ways. Our brief is that of the general community against private vested interest. We support this Bill, coming from a Conservative town like Guildford. I come from a less Conservative town such as West Ham. In principle we are united to-night; shall be divided to-morrow. The hon. Member who has spoken so well for Guildford to-night will be sent back here again. Some of us stand for the right of the community to decide its own destiny.
I would like to see the time when so long as there are proper guarantees that the ratepayers' financial resources are capable of meeting their responsibilities, the municipality should have the right to engage in any kind of enterprise, so long as they are prepared to foot the bill on their own responsibility. We have asked for that power time and time again. I have been a Member of this House eight years, and all the time I have found hon. Members saying that there is danger in the idea of public bodies entering into business. Why should there be any danger? The leader of the party opposite, the man who made it possible for them to occupy their present position, was an advocate of municipal training to its fullest possible extent, and went so far as to advocate the municipalisation of the liquor traffic. I refer to Mr. Joseph Chamberlain. Mr. Chamberlain, many years ago, advocated the extension of municipalisation to its fullest possible extent, and yet to-day we have so-called modern Con-
servatives, young men who are not in a hurry, saying that a municipality with a population of 27,000 should not be allowed to sell gas fittings or electrical fittings because it is the thin end of the wedge towards the abolition of a system which puts us at the mercy of private enterprise contractors. So far as some of us on this side are concerned, we want to give municipalities greater power in regard to self-determination. So long as financial responsibility is accepted, this House ought to give complete power to the municipalities of the country to carry on business in the interests of their people.

Mr. BRIGGS: I support this Bill on principle and not on purely local interests. In doing so, it seems to me that the opposition to two Clauses of this Bill to-night, as on other occasions, is based on two grounds: (1) the effect it will have on the local trader, the dealer in electrical fitments and electrical wiring, and, secondly, the fact that it means an extension of municipal trading. In regard to the local trader and the local electrician, I cannot see what difference it makes whether it is the municipality that is undertaking the work or whether it is a large electrical company. In either case, the position of the local trader is exactly the same, and I suggest that as the local trader has succeeded despite the large electrical company, so he will succeed despite the powers being given to the municipalities. This power gives the local trader fuller opportunities, because it is only by such powers as these that the development of electricity in our country can take place. Unless there is development of electricity in our industrial and rural centres, local traders will find their business gradually dwindling.
In regard to the question of municipal trading, I support the Bill on principle, because a necessary service for a large proportion of our people can only be rendered by the municipality. Hon. Members have supported the rejection of two Clauses of the Bill. I wonder if they are cognisant of the fact that there are industrial centres in this country and cities where 90 per cent. of the houses in the whole of the township are less than 10s. a week rental. Do any of these hon. Members suggest that the average man, occupying a house of a rental of less than 10s. a week, is in a position to find £10,
£15 or £20 for the purpose of electrically wiring his house? He cannot do it, because he has not the money, and because he cannot do it, it means that a vast proportion of our population are to-day doing without what has become and will become even more so in the future an absolute necessity of life.
It is only if this power is given to the municipalities that these people will be able to have this necessity they so long for, because the municipalities only can instal electricity wirings and fittings into these houses on what is called the hire-purchase system. if it were not so; if the private corporations could have done it, why have they not done it already The market is there and has been there for them. It is only the municipalities who can venture to undertake such a transaction, because, naturally and necessarily, they can have powers given to them that the private corporations cannot have. It is because of that fact, if for no other, that I oppose this Instruction. I sincerely hope that it will be taken as an example, so that, if similar Bills are brought forward, they will be sent upstairs to be discussed on their merits.
Here I venture to tread on more delicate ground. I would suggest that the opposition in this case are obsessed by a term, and they are not taking the merits of the Bill into consideration. They are obsessed by the term "nationalisation." I would suggest that there is a greater interest than the interest of the individual, and that is the interest of the community at large. If the interest of the community means nationalisation, it will have my support, at all events. What is the good of making a pretence that, this is the thin end of the wedge Have we so little confidence in ourselves as to think that, if it is the thin end of the wedge, we cannot hold it back, if necessary? [An HON. MEMBER: "Rank Socialism!"] If it is rank Socialism, then what you term "rank Socialism" will be a fact in 50 years. In all seriousness, I ask hon. Members whether they agree with me or not, to give this Bill a real chance of being judged on its merits.

Lieut.-Colonel JAMES: The hon. Member who has just sat down appears to be under a slight misapprehension in regard to this Bill. Only two Clauses are in dispute, Clauses 52 and 53. Ex-
ception is being taken to them, and I associate myself with those Members who have taken such exception. I should like also to slightly correct the hon. Member for Guildford (Sir H. Buckingham). He made a statement that in another place to-day a Clause, including safe and wiring, had been passed in regard, I think, to Doncaster. I am informed that while sale of fittings was allowed, the permission to wire was cut out.

Mr. BRIGGS: I happen to be one of the Committee who dealt with that question. The Bill for Doncaster was passed in its entirety as a Bill, including those two Clauses. There was only one condition made, which was that in the case of wiring the corporation should employ the local contractors to do the work.

Lieut.-Colonel JAMES: I naturally wish to amend that statement. To return to this subject, the hon. Member for Guildford said that he believed in fair trading and competition. How can competition be far if in the one case you have a private individual who, before he can earn a single penny to pay wages or profits, has to pay money out, whereas where you have public bodies they need have no care whatever? The staff, the premises, and the stock are all provided out of the public purse. It is true that possibly the public

subsequently reap the benefit, but the competition cannot be fair because the two conditions are absolutely unequal. Whatever your views may be as to whether trading should be municipal or on an individualistic basis, I cannot conceive how you can call that fair trading. If it is said that municipalities are doing this kind of business in an increasing degree, I do not think that the argument that 81 blacks or 82 blacks make one white can be upheld.

If the principle is right, it is right; if it is wrong or contrary to the public interest, it is wrong. I believe, holding the political views I do, that it is contrary to the public interest to grant those powers, not only to Guildford but to other municipalities. It is not as though private contractors were non-existent. It is not as though competition in these matters was non-existent. When you set up these trusts—for they are nothing else, to control municipalities, you kill competition and individual effort, and destroy that public interest which you pretend to support. For those reasons I shall support the Motion.

Question put, "That it be an Instruction to the Committee on the Bill that they shall leave out Clauses 52 and 53."

The House divided: Ayes, 100; Noes, 135.

Division No. 101.]
AYES.
[10.5 p.m.


Acland-Troyte, Lieut.-Colonel
Gee, Captain R.
Mitchell, S. (Lanark, Lanark)


Alexander, E. E. (Leyton)
Gibbs, Col. Rt. Hon. George Abraham
Mitchell, W. Foot (Saffron Walden)


Applin, Colonel R. V. K.
Gower, sir Robert
Moore, Lieut.-Colonel T. C. R. (Ayr)


Apsley, Lord
Greene, W. p. Crawford
Nelson, Sir Frank


Balfour, George (Hampstead)
Gretton, Colonel John
Nicholson, Col. Rt. Hon. W. G. (Ptrsf'ld.)


Barnett, Major Sir Richard
Gunston, Captain D. W.
Oakley, T.


Barnston, Major Sir Harry
Hannon, Patrick Joseph Henry
O'Connor, T. J. (Bedford, Luton)


Bourne, Captain Robert Croft
Harland, A.
Phillipson, Mabel


Bowyer, Captain G. E. W.
Heneage, Lieut.-Col. Arthur P.
Pllcher, G.


Brocklebank, C. E. R.
Herbert, Dennis (Hertford, Watford)
Pownall, Lieut.-Colonel Assheton


Broun Lindsay, Major H.
Holbrook, Sir Arthur Richard
Raine, W.


Brown, Brig.-Gen. H. C. (Berks, Newb'y)
Holland, Sir Arthur
Rawson, Sir Alfred Cooper


Butler, Sir Geoffrey
Holt, Captain H. P.
Richardson, Sir P. W. (Sur'y, Ch'ts'y)


Cane, Gordon Hall
Hope, Capt. A. O. J. (Warw'k, Nun.)
Roberts, Samuel (Hereford, Hereford)


Cautley, Sir Henry S.
Hopkins, J. W. W.
Ropner, Major L.


Charteris, Brigadier-General J,
Hopkinson, A. (Lancaster, Mossley)
Ruggles-Brise, Major E. A.


Clarry, Reginald George
Hudson, Capt. A. U. M. (Hackney, N.)
Salmon, Major I.


Crookshank, Col. C. de W. (Berwick)
Huntlngfleld, Lord
Samuel, Samuel (W'dsworth, Putney)


Crookshank, Cpt. H. (Lindsey, Galnsbro)
Insklp, Sir Thomas Walker H.
Sandeman, A. Stewart


Curzon, Captain Viscount
James, Lieut.-Colonel Hon. Cuthbert
Sanderson, Sir Frank


Davies, Dr. Vernon
Kindersley, Major G. M.
Shaw, R. G. (Yorks, W.R., Sewerby)


Davles, Maj. Geo. F. (Somerset, Yeovll)
Knox, Sir Alfred
Simms, Dr. John M. (Co. Down)


Dawson, Sir Phillp
Little, Dr. E. Graham
Smithers, Waldron


Edmondson, Major A. J.
Looker, Herbert William
Stanley, Hon. O, F. G. (Westm'eland)


Elveden, Viscount
Lougher, L.
Steel, Major Samuel Strang


Evans, Captain A. (Cardiff, South)
Lumley, L. B.
Templeton, W. P.


Everard, W. Lindsay
MacAndrew, Major Charles Glen
Vaughan-Morgan, Col. K. p.


Falls, Sir Charles F,
Maclntyre, Ian
Warner, Brigadier-General W. W.


Finburgh, S.
McNeill, Rt. Hon. Ronald John
Waterhouse, Captain Charles


Ford, Sir P. J.
Macquisten, F. A.
Watts, Dr. T,


Fremantle, Lieut.-Colonel Francis E.
Makins, Brigadier-General E.
Wheler, Major Sir Granville C. H.


Gates, Percy
Mason, Lieut.-Col. Glyn K.
Williams, Com. C. (Devon, Torquay)


Winby, Colonel L. P.
Wise, Sir Fredric
TELLERS FOR THE AYES.—


Windsor-Clive, Lieut.-Colonel George
Wragg, Herbert
Mr. Campbell and Sir Harry Foster.


NOES.


Ammon, Charles George
Henderson, T (Glasgow)
Robinson, W. C. (Yorks, W. R., Elland)


Attlee, Clement Richard
Henderson, Lieut.-Col. V. L. (Bootle)
Rose, Frank H.


Barker, G. (Monmouth, Abartillery)
Hills, Major John Waller
Rye, F. G.


Barnes, A.
Hirst, G. H.
Scrymgeour, E.


Barr, J.
Hope, Sir Harry (Forlar)
Scurr, John


Batey, Joseph
Hudson, J. H. (Huddersfield)
Sexton, James


Birchall, Major J. Dearman
Jacob, A. E.
Shaw, Rt. Hon. Thomas (Preston)


Boothby, R. J. G.
Jenkins, W. (Glamorgan, Neath)
Shaw, Capt. W. W. (Wilts, Westb'y)


Broad, F. A.
John, William (Rhondda, West)
Shepherd, Arthur Lewis


Bromfield, William
Johnston, Thomas (Dundee)
shiels, Dr. Drummond


Bromley, J.
Jones, Henry Haydn (Merioneth)
Short, Alfred (Wadnesbury)


Buxton, Rt. Hon. Noel
Jones, J. J. (West Ham, Silvertown)
Sitch, Charles H.


Cape, Thomas
Jones, T. I. Mardy (Pontypridd)
Smith, Ben (Bermondsey, Rotherhithe)


Charleton, H. C.
Kelly, W. T.
Smith, H. B. Lees (Keighley)


Clowes, S,
Kennedy, T.
Smith, Rennle (penistone)


Cluse, w. s.
Lansbury, George
Snell, Harry


Cockerlll, Brigadier-General G. K.
Lawson, John James
Snowden, Rt. Hon. Philip


Connolly, M.
Lee, F.
Spencer, G. A. (Broxtowe)


Cova, W. G.
Lowth, T.
Stamford, T. W.


Craig, Ernest (Chester, Crewe)
Lucas-Tooth, Sir Hugh Vere
Stewart, J. (St. Rollox)


Cunliffe, sir Herbert
Luce, Maj.-Gen. Sir Richard Herman
Strickland, Sir Gerald


Dalton, Hugh
Lunn, William
Taylor, R. A.


Davies, Ellis (Denbigh, Denbigh)
Mackinder, W.
Thomson, Trevelyan (Middlesbro, W.)


Davies, Rhys John (Westhoughton)
MacLaren, Andrew
Thurtle, E.


Day, Colonel Harry
Manningham-Buller, Sir Mervyn
Tinker, John Joseph


Duckworth, John
March, S.
Townend, A. E.


Dunnico, H.
Merriman, F. B.
Trevelyan, Rt. Hon. C. P.


Edwards, C. (Monmouth, Badwellty)
Montague, Frederick
Varley, Frank B.


England, Colonel A.
Morrison, R. C. (Tottenham, N.)
Viant, S. P.


Forrest, W.
Naylor, T. E.
Warne, G. H.


Garro-Jones, Captain G. M.
Newman, Sir R. H. S. D. L. (Exeter)
Watson, Sir F. (Pudsey and Otley)


Gibbins, Joseph
Newton, Sir D. G. C. (Cambridge)
Watts-Morgan, Lt-Col. D. (Rhondda)


Gillett, George M.
Nuttall, Ellis
Webb, Rt. Hon. Sidney


Gosling, Harry
Oliver, George Harold
Whiteley, W.


Graham, Rt. Hon. Wm. (Edin., Cent.)
Palin, John Henry
Wilkinson, Ellen C.


Granfell, D. R. (Glamorgan)
Paling, W.
Williams, David (Swansea, E.)


Griffiths, T. (Monmouth, Pontypool)
Parkinson, John Allen (Wigan)
Williams, Dr. J. H. (Lianelly)


Groves, T.
Pethick-Lawrence, F. W.
Williams, T. (York, Don Valley)


Grundy, T. W.
Potts, John S.
Wilson, C. H. (Sheffield, Attercliffe)


Guest, J. (York, Hemsworth)
Price, Major C. W. M.
Wilson, R. J. (Jarrow)


Hall, G. H. (Merthyr Tydvll)
Purcell, A. A.
Windsor, Walter


Hardie, George D.
Radford, E. A.
Withers, John James


Hartshorn, Rt. Hon. Vernon
Richardson, R. (Houghton-le-Spring)
Wright, W.


Hayday, Arthur
Riley, Ben



Hayes, John Henry
Ritson, J.
TELLERS FOR THE NOES—


Henderson, Right Hon. A. (Burnley)
Robinson, Sir T. (Lancs., Stretford)
Mr. Briggs and Sir Henry Buckingham.


Bill read a Second time, and committed to a Committee of the Whole House for To-morrow.

BERMONDSEY BOROUGH COUNCIL (STREET TRADING) BILL (by Order).

Consideration, as amended, deferred till Tuesday next.

CONSOLIDATED FUND (No. 1) BILL.

Postponed Proceeding resumed on Question, "That the Bill be now read a Second time."

The remaining Orders were read, and postponed.

ADJOURNMENT.

Resolved, "That this House do now adjourn."—[Commander Eyres Monsell.]

Adjourned accordingly at Fifteen Minutes after Ten o'Clock.